The good news: The Coachella Valley Water District, which serves the majority of the Coachella Valley, is confident in its ability to provide clean, safe drinking water. Given the fact that California is in the midst of what’s being called the worst extended period of drought in California history, this is a relief.
The bad news: The majority of CVWD customers will soon be paying more for their water—in some cases, a lot more.
On June 8, the CVWD board of directors voted 4-1 in favor of adopting a new water-rate structure—while claiming their hands were tied by California’s Proposition 218. It was passed by the state’s voters in 1996, and a 2006 court decision affirmed that it applies to water agencies.
CVWD Division 2 Director Anthony Bianco said he empathized with upset customers who spoke out (mostly virtually) at the June 8 meeting, just before he cast the lone “no” vote on the adoption of Ordinance 1441, which officially made the 2021 “cost of service study,” dictated by Prop 218, the yardstick for rate levels through 2026.
“The problem that the board has is that we’re a public agency,” Bianco said, “and an independent person looks at this. Under our state law the way it is now, we can only charge the cost to deliver water (to each specific type of customer).”
In this case, the “independent person” was the company Carollo Engineers. It conducted—at a cost of $247,503—the study of real costs associated with domestic water, canal water and replenishment assessments.
“We can’t arbitrarily, as board members, just change things to make it more expensive for commercial (customers) and less expensive for (others).” Bianco continued. “I mean, I wish we could, but under state law, this is the way that it has to be done. … There is no leeway for cutting corners for people who are on a fixed income, or a single-family home versus commercial (properties).”
In a recent interview with the Independent, Katie Evans, the district’s communications and conservation director, explained the need for a cost of service study.
“Things change as demand changes and our costs change,” Evans said. “I mean, there are lots of cost changes for us. Electricity costs change; fuel costs change; vehicle costs change. … Some of the increases are based on things that are projected such as … capital improvement projects and our schedule to build those things. For example, if there’s a project that we’re not going to build until 2023, or 2024, it’s budgeted for that time, and that adjusts the scheduling of the (required) rate increases.”
To make things even more confusing, the cost of service study doesn’t dictate what the actual water rates will be over the next five years. While the projected maximum water-service rates, including maximum increases (or decreases, because some customer’s rates will actually be reduced), are established definitively by the study for the 2023-2026 fiscal years, new one-year budgets must be developed and approved by the CVWD board of directors annually.
“The only (final rate adjustment) that was approved was for this year,” Evans said. “So the rate increases for this current year (fiscal 2021-22) were approved, but over the next four years, the staff will have to do an analysis each spring and go back to the board with our model to determine if we need an increase, and if so, how much. But it cannot exceed those maximum amounts” set by the cost of service study.
If all goes well, those rate increases will be nowhere near the maximums set by the cost of service study. After the last five-year study was adopted in 2016, the total maximum increase for fiscal years 2017-2021 was set at a potentially whopping 67.5% for a single-family residential customer using 20 centum cubic feet (CCF) of water each month. (One CCF is equal to 748 gallons.) However, the actual increase in annually established rates after five years totaled only 6.1%.
Under the newly adopted five-year rate structure, that same customer could see their rates increase from $32.20 in fiscal year 2021-2022 to a maximum of $47.91 in 2025-2026, Evans said, which would represent a cumulative increase of 48.8%.
Meanwhile, a budget item calling for $2.5 million in funding to be set aside for CVWD staff raises irked some customers—just as a similar budget item did five years ago. We asked Evans to explain that figure.
“It’s a staff-generated number, but it comes from our contractual obligations with our employee bargaining units for cost-of-living increases and then merit increases,” Evans said. “It’s not like we passed this rate increase, and now everybody gets a raise. Our employees are all part of bargaining units, or unions, and we negotiate with them for their contracts, and the cost-of-living increases are part of their contractual employment agreement. Any salary adjustment that’s a raise is based entirely on performance. We have a pay-for-performance program here, and it’s not like you get a step increase every year. They are merit-based increases.”
Another topic of concern among the board members at the June 8 meetings was whether the district should, or could, increase the amount of financial aid it makes available to customers who can’t afford their newly increased monthly water bills. The current maximum rate relief amount is a $100 annual stipend per customer. We asked Evans if more rate relief may be coming.
“Staff will be making a new presentation to the board going forward and will request their approval of an increase in that program,” Evans said. “I can’t say if it will be (another) $100, $60 or $50, but our customer service staff is working on it. … It sounded like the board would be very supportive of some increase.”
Evans mentioned the United Way-facilitated “Help to Others” program as another source of assistance for CVWD customers in need.
“It is a great program through which we’ve been able to help a lot of people who need assistance,” she said. “Another real benefit of the program is that, when somebody calls us and tells us that they’re having trouble paying their water bill, when we connect the customer with the United Way … they often can connect (the customer) with other programs that can help them with other bills or expenses.”