The Marin Municipal Water District (MMWD) is notifying its 185,000 customers in the coming weeks of its plans to raise water rates, a move that would mark the the agency has raised its rates.
Citing declining revenue as a result of the success of its conservation efforts, as well as rising costs on items like electricity and health insurance for its current and retired employees, the district seeks to raise its rates by 6 percent. For the district’s average user, the hike would raise the rate from a $94.44 two-month water bill to a $100 two-month bill. The district will host a workshop on the rate hike on March 29 and the board is set to consider the increase at its April 19 meeting.
“Utility increases are the norm and we’re way ahead of the curve in keeping our rate increases at a moderate level,” said Cynthia Koehler, a Mill Valley resident and the president of the MMWD board. “We have a bunch of fixed costs that don’t go down just because our customers are consuming less water, and we have to pay our bills.”
Koehler, who voted against moving forward with the increase at the board’s Feb. 16, said she supports the short-term need to raise rates but hopes the process could be slowed down to allow for recommendations from the district’s rate advisory committee, which is looking into long-term budget fixes in an effort to avoid annual rate hikes.
The district saw its revenue from water use go down nearly 14 percent in 2010-2011, and it’s projected to continue to slide this year as water consumption went down nearly 3 percent for the six months ended Feb. 1 as compared to the same period a year ago.
The decline in water sales experienced over the last four years is from a combination of “more than anticipated success with our water conservation program, the slow economic recovery from the recession and summer temperatures which were substantially lower than normal,” district officials said in a Feb. 16 staff report on the issue.
Koehler said it is important for MMWD customers to understand that while water conservation is a good thing, it negatively impacts the district’s revenue. She noted the continued suspension of the district's conservation rebate program, which allows homeowners to receive as much as $350 toward the purchase of efficient irrigation equipment. The rebate, instituted in 2007, seeks to reduce outdoor water use, which accounts for 50 percent of summer water consumption.
“The thing to compare the rate increase to is what the rate would have been if customers weren’t conserving,” she said. “Rates would have much, much higher if we had to go out and get more water. In addition, we have a staff that we have to support and it doesn’t matter have how much water you use, we still need that staff.”
Some MMWD customers said the district has had plenty of time to anticipate the continuing successful conservation efforts of its customers and budget accordingly.
"The board has had more than enough time to change its business methods since 2006 to not have this happen over and over," said Mill Valley resident Bob Silvestri. "But in fact, nothing's fundamentally changed at all."
The district cited a number of rising costs for the rate hike, including a 15.5 increase in electricity costs due to the rise in rates from the Marin Energy Authority, as well as a 26.6 increase in health insurance premiums for its retired employees.
Another one of those increasing costs will be the pay of Paul Helliker, the district’s longtime general manager who is resigning from the position as of March 1. In a move Koehler acknowledged was “an unusual situation,” Helliker is receiving a severance package following his resignation, in addition a payout of all of his vacation and benefits. Helliker is also being kept on through December 12, 2012, as a consultant, easing the transition to a new general manager.
Helliker is due $79,645 in vacation and benefits payment on June 11, though he will be on vacation from March to June and “drawing down his vacation leave and holiday pay,” according to the agreement reached between parties. Helliker will receive $48,639 severance, the equivalent of three months of Helliker’s salary of $16,213 per month, on Dec. 18. From June 12 to Dec. 12, Helliker will be paid as a consultant at a rate of $19,131 per month, for a total of $114,786. In all, Helliker will receive $195,851 in salary and consulting fees from the district in 2012, up from his current annual salary of $189,000.
“We really wanted to keep Paul and have the benefit of his expertise for as long as possible,” Koehler said. “That was a big piece of it. He’s very well regarded, almost iconic in the water management community, and with the (agreement), we were trying to make things work for everybody.”
The rate increase would go into effect May 1. The district is sending out mailers in the next few weeks to all customers notifying them of the plans to increase rates.