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Home My WebLink AboutPrsntatn - CVWD Proposed Changes - Water RatesGNATM TR'C Established in 1918 as a public agency Coachella Valley Water District O�S Directors: Officers John P. Powell, Jr., President - Div. 3 Jim Barrett, General Manager Peter Nelson, Vice President - Div. 4 Julia Fernandez, Board secretary G. Patrick O'Dowd - Div. 1 Ed Pack - Div. 2 Best Best & Krieger LLP Attorneys C6stulo R. Estrada - Div. 5 March 16, 2016 t John Wohlmuth, City Manager City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 �� S ��'``�� t✓� (1P v� Dcar Mr. Wohlmuth: �� Coachella Valley Water District (CVW'D) remains dedicated to supporting the residents, visitors. and businesses of the Coachella Valley by providing eater that is reliable, safe, and affordable. When we encounter matters with the potential to impact water quality or the cost to provide service, CVWD is committed to informing its customers and stakeholders as promptly and comprehensively as possible. "I his commitment to communication has driven an open dialog vtiith the communities we serve as \,�e work to comply with California's conservation mandates and the state's new drinking water standard for chromium-6, a naturally occurring mineral in the Coachella Valley's groundwater. Building the facilities necessary to treat the Coachella Valley's drinking water for chromium-6 %gill cost an estimated $250 million, with annual operation and maintenance costs in the tens of millions. At the same time; reduced water sales and resulting revenue to>, have impacted CVWlYs ability to cover these costs, as well as the rising costs to operate and maintain the complex water system that serves valley residents. in order to ensure continued financial stabilit} \Nhile continuing to promote conservation. the CVWD Board of Directors is considering increases to its water rates and changes to the structure of these rates. The enclosed flyer includes information on upcoming Public Workshops regarding the proposed changes and increases. Please feel free to share this information with lour constituents. Additional details are available at �»kw.cv�vd.org/ratechanaes. We �Nould like the opportunit} to share a brief presentation about these potential changes and increases. and the reasons for them during a public Cite Council meeting. If,. ou are interested in having such a presentation at a future meeting, or would like a more detailed discussion with staff, please contact Isabel Luna at (760) 398-265 I, extension 2204, or at ILgna ci cvwd.org. We look forward to our continued dialogue and collaboration. Sincerely. VI.arrett General Mana<ler Enclosure as r We welcome your questions and input during these workshops. s+RT��R Stay connected with us! www.cvwd.org r r - Thursday, March 24 10 a.m. - noon Steve Robbins Administration Building (75515 Hovley Lane Bast, Palm Desert) Monday, March 28 5:30 - 7:30 p.m. CVWD Coachella Office (51501 Tyler Street, Coachella) Wednesday, April 27 5:30 - 7:30 p.m. CVWD Coachella Office (51501 Tyler Street, Coachella) Monday, May 2 5:30 - 7:30 p.m. Steve Robbins Administration Building (75515 Hovley Lane East, Palm Desert) Wednesday, May 11 10 a.m. - noon Steve Robbins Administration Building (75515 Hovley Lane East, Palm Desert) Visit www.cvwd.org/ratechanges or call (760) 391--9600 for more information. r Le ogradecemas su' pregunto y su aporI durante estos tallere I �■sr�t�c iMantengase en contacts con nosotros! www.cvwd.org C _ 9IM1 Jueves 24 de marzo 10 a.m. - medio dia Steve Robbins Administration Building (75515 Hovley Lane East, Palm Desert) Lunes 28 de marzo 5:30 - 7:30 p.m. CVWD Coachella Office (51501 Tyler Street, Coachella) Miercoles 27 de abril 5:30 - 7:30 p.m. CVWD Coachella Office (51501 Tyler Street, Coachella) Lunes 2 de mayo 5:30 - 7:30 p.m. Steve Robbins Administration Building (75515 Hovley Lane East, Palm Desert) Miercoles 11 de mayo 10 a.m. - noon Steve Robbins Administration Building (75515 Hovley Lane East, Palm Desert) Visite www,cvwd.org/ratechanges o Ilame al (760) 391-9600 pars mas informaci6n. Klassen, Rachelle From: Sent: To: Cc: Subject: Hi, Heather. Klassen, Rachelle Thursday, March 24, 2016 1:40 PM 'Heather Engel' Isabel Luna; Katie Ruark RE: CVWD Presentation at Palm Desert City Council Mtg. - Water Rate Changes I agree that April 28 would be best of the two. So we'll plan on it here. If you want to send me the PowerPoint in advance so that Council has it in their agenda packets, we're happy to do that. Or if you intend to show it that day, that's fine too. You may bring it on a flash drive to load into the Council Chamber computer about 3:30-3:45 p.m. that afternoon in advance of the meeting to have it queued up for presentation. But, of course, we can talk more closer to the date about how you'd like to do this as well. For now, plan on Thursdav, April 28, at 4:00 p.m. Thank you! Rachelle 2acheU,e, r' ). Kla�, MMC City Clerk, City of Palm Desert 73510 Fred Waring Drive Palm Desert, CA 92260-2578 PH: (760) 346-0611, Ext. 304 Fax: (760) 340-0574 e-mail: rklassen(@citvofpalmdesert.orR From: Heather Engel fmailto:HEncieWbcvwd.ora] Sent: Thursday, March 24, 2016 1:32 PM To: Klassen, Rachelle Cc: Isabel Luna; Katie Ruark Subject: FW: CVWD Presentation at Palm Desert City Council Mtg Hi Rachelle, - Water Rate Changes Thank you for letting CVWD come and present at an upcoming Palm Desert City Council meeting. General Manager Jim Barrett is available either April 28 or May 26. More residents will be in town April 28, so that may be the best date, but I will defer if you have a preference. We will have a PowerPoint presentation, which we will try to keep to 5-8 minutes of highlights and be available to answer any questions about specifics. We'll also have handouts. Let me know if you have any questions. Thanks, Heather 1 From: rklassen(dcitvofoalmdesert.ora, fmailto:rklassen(cbcitvofpalmdesert.orq] Sent: Wednesday, March 23, 2016 4:07 PM To: Isabel Luna Cc: iohlmuth(dcitvofoalmdesert.ora; devans(@citvofoalmdesert.ora Subject: CVWD Presentation at Palm Desert City Council Mtg. - Water Rate Changes Hi, Isabel. City Manager John Wohlmuth asked that I follow-up on Jim Barrett's March 16 letter, offering to make a presentation at one of our upcoming City Council Meetings. Palm Desert would like to have such a presentation. Here are the dates of our upcoming meetings: Thursday, April 14, 2016 — 4:00 p.m. Thursday, April 28, 2016-4:00 p.m. Thursday, May 12, 2016 — 4:00 p.m. Thursday, May 26, 2016 — 4:00 p.m. Do any of these work for you? Please let me know —you may also call me to discuss any related details. Thank you! Rachzl D. Kla-a ,, MMC City Clerk, City of Palm Desert 73510 Fred Waring Drive Palm Desert, CA 92260-2578 PH: (760) 346-0611, Ext. 304 Fax: (760) 340-0574 e-mail: rklassen@citvofgalmdesert.ore 2 Palm Desert City Council meeting April 28 , 2016( 1TEF Coachella Valley Water District STR►CC www.cvwd.org/ratechanges 1 These are Historic Times Chromium-6 Regulations • $250M capital program • $8M average annual operating costs Historic Drought • Governor's Executive Order • 36% Reductions — now 32% First Water Budget Adjustments since 2008-9 • Planned update regardless of drought Sustainable Groundwater Management Act San Juan Capistrano Court Opinion 2 Avoiding Rate Increases — Deferred operations , maintenance and capital improvement projects during recession — Early retirement program in 2009 reduced staffing levels; limited pay increases and increased employee cost-share for benefits, retirement — New efficiencies , energy savings — State loan for CR6 keeps interest rates below 2% — Rate increases have not kept pace with inflation 3 Revenue Requirements : Significant Drivers 50% 5) Baseline + Conservation, 45% RAC, Cr-6, & Cash-funded CIP (non-Cr-6) 40% --- 4) Baseline + Conservation, 35% RAC, & Cr-6 Cost � 1 30% ' — — 3) Baseline + Conservation & RAC Increases 25% 20% 2) Baseline + State- 15% Mandated Conservation a % � 10 •• 1) Status Quo 5% 0% O co a) O r N CO Lf) C0 N- r r T T NNNNNNNN O O O O O O O O O O O NNNNNNNNNNNN 4 Changes to Water Budgets Existing Proposed Tier 1 : Excellent Up to 10 ccf* Up to 8 ccf* Tier 2: Efficient Up to 105% of budget Up to 100% Tier 3: Inefficient 105% up to 150% of budget 100% up to 175% Tier 4: Excessive 150% up to 250% of budget 175% up to 300% Tier 5: Wasteful 250% or more of budget 300% or more of budget *Except in cases where an appeal has been granted to a customer for more than four people in the home 5 The Bottom Line • Overall impact is a tightening of the water budget by approximately 25% • 78% of customers in single-family homes will meet the new budget without any changes • Average customer who uses 20 ccf/month and meets water budget will see approximately $6 increase/month 6 Regional Rate Comparison Residential Rate Comparison as of 1/11/2016 CVWD Myoma Beaumont Eastern Proposed Dunes Indio Desert Coachella Mission Cherry Municipal CVWD Charges Water Water Water Water Springs Valley Water Fixed Charges 7.00 11.30 5.00 18.14 10.75 13.80 9.32 13.51 12.76 Consumption Charges 21.30 22.70 23.72 22.50 31.40 30.00 34.99 35.00 77.62 Total per 20 Ccf Usage 28.30 34.00 28.72 40.64 42.15 43.80 44.31 48.51 90.38 Residential Rate Comparison 100 80 60 40Pligrilillint liii o 20 : 1 I I I I p 5 c c c c J c cJ� race S,a- S,ae ..e- 42,- ``moo, �a��e babe aG ce5 a`o 6% ��a c . al ore OJ \� Oa, re yyo Gre `�.Q QcoQ ova Goa •` o*‘ 4, p �J �eIP y`eF <,a District ■Fixed Charges taConsumption Charges •CVWD Proposed Fixed Charge • CVWD Proposed Consumption Charge 7 Proposed Water Rate Increases Proposed Proposed Existing Rate Rate Budget (per ccf) (per ccf) Difference Tier 1 : Excellent Up to 8 ccf* $1 .01 $0.95 -$0.06 Tier 2: Efficient Up to 100% $1 .12 $1 .32 $0.20 Tier 3: Inefficient 100% up to 175% $1 .68 $2.46 $0.78 Tier 4: Excessive 175% up to 300% $2.24 $4.67 $2.43 Tier 5: Wasteful 300% or more $4.48 $6.13 $1 .65 *Appeals accepted for more than four people in the home. 8 Proposed Fixed Rate Increases Landscape Meter Existing Size Rates Single Family Multifamily Commercial Irrigation Rates Accounts Rates Accounts Rates Accounts Rates Accounts 3/4" ! $7.00 I $11.30 88,979 ! $12.90 1,282 ! $8.10 2,308 ! $28.00 2,106 1" j $9.10 j $18.80 3,324 j $21.50 1,208 j $13.50 948 j $46.70 793 1 1/2" j $11.50 j $37.60 333 $43.10 508 4 $27.00 635 j $93.40 1,365 2" $18.20 $60.20 26 $68.90 428 $43.20 639 $149.50 601 3" ; $70.00 ; $112.80 1 $129.20 5 $80.90 7 ; $280.30 5 4" ! $88.90 I $188.00 n/a $215.30 6 $134.90 n/a ! $467.10 n/a 9 —Example Single-familyhome (Meets new budget most months) at August Usage: 22 Ccf ------------—- Water Water _ a Budget Bill f�� Current 38 $ 30.76 Proposed 35 $ 37.38 Change -8% $ 6.62 0 January Usage: 19 Ccf Water Water Budget Bill ., Current 24 $ 32.76 Proposed 18 $ 34.56 Will Change -25% $ 1.80 E � . 10 Example — -Larger sin lefamil home single-family (Meets current budget some months, but not new budget) 4,„.4110, , August Usage: 71 Ccf Water Water Budget Bill Current 73 $ 85.42 4 _R. Proposed 54 $ 121.44 '' t 1 * Change -26% $ 36.02 :*1,, - , , �, rr January Usage: 39 Ccf_ _ ti` ° 0 °i -------- Water ---Water .> .4 k :.iit . Budget Bill - '!"' Current 36 $ 50.14 , \\/..,r, �� f' t Proposed 22 $ 79.20 ,« ,� 3 a a, Change -39% $ 29.06 11 We Can Help Customers Meet Their Water Budgets Rebate and incentive programs (residents, businesses, HOAs, cities) : — Turf removal $1 /square foot — Free Smart Controllers — Irrigation nozzles — Toilet rebates — Free Indoor Kits — Water Brooms for commercial users Education : — Landscape Workshops — Conservation reviews/audits 12 What's next? • Series of Public Workshops, community presentations • April 5 - Board initiated the Prop 218 process • Notice will be sent to all domestic water customers explaining proposed increases and how to protest • More Public Workshops, community presentations • June 14 - Board meeting/Public hearing to vote on proposal • If approved, new rates go into effect July 1 13 Questions? • Visit www.cvwd .org/ratechanges for more details or to submit comments to the Board of Directors 14