Rate Increase FAQ
Why raise the fixed base rate so much?
Operating and maintaining the infrastructure to bring water to each connection makes up about 94% of SLVWD’s expenses. These expenses are fixed. They are independent of whether or not a customer actually uses any water. This on-demand capacity provides essential emergency services to individual customers such as “fire flow” (the amount of water necessary to fight a house fire), having the storage necessary for CalFire and local fire departments to fight wildfires, and supplying water when sources are off-line due to storms, landslides, or earthquakes.
Currently, SLVWD captures only about 37% of its costs through the fixed part of the bill. Compared to other districts, this percentage is on the low end, especially for mountainous, spread-out water districts like ours. Increasing the proportion of SLVWD’s revenue that comes from the fixed portion of each bill to 45% provides SLVWD with more financial stability, because more of its revenue becomes independent of the amount of water used. In recent years, sizable revenue shortfalls have occurred when consumption dropped during droughts. (Note: In response to similar concerns, Soquel Creek Water District has proposed an increase in the fixed portion of their bills to about 55%, as well as steep Water Shortage Emergency Rates.)
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