Tier 1 rates to increase 33 percent April 1.

The Tier 1 usage rate will go from $2.85 to $3.79 per 1,000 gallons, effective April 1.  This is expected to generate enough revenue to meet the expense budget approved November 28, 2023, plus a new annual fee of $44,000 imposed by Fox Canyon Groundwater Management Agency. The budget covers operating expenses and $266,000 for unspecified capital projects,

The Service Availability Charge was raised from $9.00 to $12.90 per share per month at the February 26 Board meeting, and a decision on the 3-tier water usage schedule was deferred pending completion of the rate consultant’s report and Staff analysis.  Three options were presented at the March 26 meeting and one was adopted 4-0 after Board discussion and comments from shareholders.

The new Tier 1 rate ($3.79) is not as high as it was in 2022, when it was $4.00. The 2023 rates for Tiers 2 and 3 ($8.50 and $20.00, respectively) were not changed because of concern that those rates are historically high and may be depressing sales.  (When sales decline, revenues decline, and reduced pumping can lead to a permanent diminution of our pumping rights.)

For further context, the Staff report projects that 72.4 percent of water sales will be in Tier 1, 20.1 percent in Tier 2, and 7.5 percent in Tier 3.  Revenues for the fiscal year ending November 30, 2024 are projected to come 23.3 percent from the Service Availability Charge, 35.4 percent from Tier 1, 22.0 percent from Tier 2, and 19.3 percent from Tier 3.

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