Rainbow MWD sets March 26 hearing for rate increases

The Rainbow Municipal Water District is expected to adopt new water rates at the March 26 board meeting.

Rainbow’s board voted 4-0, Jan. 22, with Michael Mack absent, to set the March 26 hearing date including the 1 p.m. starting time. If the new rates are adopted, they will take effect April 1.

“This is our annual rate increase hearing,” Rainbow general manager Tom Kennedy.

In November 1996, the state’s voters passed Proposition 218, which requires a public vote on benefit assessments. Proposition 218 exempts water agencies from raising rates if a cost of service study shows a relationship between the rates and the agency’s cost to provide water. A rate setting policy can be in effect for up to five years and must include a rate design and public review.

Rainbow approved cost of service studies in 2010 and 2015. Although an update was not legally needed until 2020, the 2015 rate study was based on an estimated annual demand of 18,000 acre-feet and recent actual demand figures are closer to 16,000 acre-feet. The decreased sales created a revenue shortfall for Rainbow, and in July 2017 the Rainbow board approved a contract with Raftelis Financial Consultants for a new cost of service study. The new cost of service study also included funding approximately $3 million in capital improvement or major maintenance needs.

The Proposition 218 exemption process requires mailed notice of the new rates and includes a protest provision; if more than half of the district’s property owners or account holders submit a protest letter the planned rate increase is rescinded. Last year Rainbow adopted new rates based on a cost of service study. The rate increase was for one year only, so a new notice and a protest process precedes this year’s rate increase.

The Jan. 22 date to set the March 26 hearing exceeds the minimum notice time of 45 days before the hearing.

“We’re giving two months,” Kennedy said.

Some of Rainbow’s costs are for infrastructure and operations, but Rainbow does not have a local water supply at this time so water is purchased from the San Diego County Water Authority and the Rainbow rates reflect SDCWA rates and charges. The commodity charge equates one unit to 100 cubic feet or 748 gallons.

For the first 10 units each month the rates for single-family residential accounts or agricultural accounts with a residence will increase from $3.64 to $3.73 per unit. The 11th through 26th units will have rates of $3.99 per unit, which is an increase from $3.86. Each unit beyond the 26th unit will have a rate of $4.48 for single-family residential accounts, which is currently $4.27, while the per-unit rate beyond 26 units for an agricultural property with a residence will increase from $3.56 to $3.63. The commodity charge for all units will increase from $3.76 to $3.87 for multi-family residential accounts and from $3.89 to $4.03 for commercial accounts. Customers using the Transitional Special Agriculture Water Rate will be billed $3.94 instead of $3.70 for the month’s first 10 units, $4.21 instead of $3.92 for the 11th through 26th units and $3.15 rather than $3.04 for each unit beyond the 26th. All institutional units will be billed at $4.14 rather than $3.98 while the increase for all construction water units will be from $4.87 to $5.20.

The monthly fixed operation and maintenance charges for single-family or multi-family residential, commercial or institutional accounts will increase from $61.46 to $65.56 for a half-inch or 3/4-inch meter, from $99.37 to $105.59 for a 1-inch meter, from $194.12 to $205.62 for a 1 1/2-inch meter, from $307.82 to $325.67 for a 2-inch meter, from $667.85 to $705.81 for a 3-inch meter, from $1,198.46 to $1,266.04 for a 4-inch meter and from $2,468.09 to $2,606.55 for a 6-inch meter.

For agricultural accounts the monthly increase will be from $85.37 to $94.25 for a half-inch or 3/4-inch meter, from $139.18 to $153.36 for a 1-inch meter, from $273.77 to $301.20 for a 1 1/2-inch meter, from $435.27 to $478.61 for a 2-inch meter, from $946.65 to $1,040.37 for a 3-inch meter, from $1,700.30 to $1,868.25 for a 4-inch meter and from $3,503.62 to $3,849.18 for a 6-inch meter.

Those amounts include the SDCWA pass-through charge.