Montara Water and Sanitary District officials tabled discussions regarding a new water rate study at their July 18 meeting. The study would advise how much to raise water rates or implement some other form of collecting revenue.
MWSD took a $500,000 loan from its internal sewer fund to cover the costs of water infrastructure improvements. The district estimates it will not have “sufficient income to cover next year’s financial needs,” the agenda stated.
Four years ago, the MWSD approved an annual 3 percent water rate increase. Now that period is expiring, and the district will consider how to fill that continuing revenue gap at its August meeting.
“Every agency should raise rates on an annual basis simply to offset inflation,” MWSD General Manager Clemens Heldmaier said. “I can guarantee that is the minimum we’re doing. What we also see is a need to actually increase this a little more than inflation.”
Heldmaier said a 3 percent increase would not keep up with inflation. The district needs the funds to maintain “state of the art” facilities, he said.
“It’s kind of like painting the Golden Gate Bridge,” he said. “You start at one end and once you’re done with the other end, you just drive back to where you started and continue. It’s an ongoing process of replacement.”
Montara resident Gregg Dieguez, who closely follows the local agency, worries that the MWSD’s current financial situation is not sustainable. He described a “NIMTOO” mentality, which means “not in my term of office.”
“(They’re) not going to be the guy to tell voters they have to pay more,” he said.
He hopes the rate study will plan for a sustainable water future, maybe even 100 years out.
“They can’t just say, ‘We don’t want to look at that,’” Dieugez said.
Water districts find themselves in a difficult situation. While they encourage residents to conserve water, that means they sell less water and therefore need to raise rates in order to maintain infrastructure. The district had to transfer more than $545,000 out of the reserves to cover all the expenses this year, but Heldmaier said the reserves are not sufficient.
“We’re really trying to find out how can we best do this without really impacting the ratepayer too much,” he said. “Of course, if you need to raise rates, you are going to impact your ratepayers, but I think there are some creative ways to do this.
“I think what I can safely say is that over the coming years — and ... we’re going to try to spread this out over the coming years — we will see rate increases above inflation,” he added.
The MWSD board will consider creative ideas that may include a fixed surcharge or an assessment on property tax, similar to the way sewer rates are collected. These were ideas floated at the meeting by Alex Handlers, a principle with Bartle Wells, the consultant on the rate study.
“We really want to hash through some of this stuff behind the scenes before stuff gets brought to the board,” Handlers said during the meeting.
Regardless of what the board decides, the process will include notices to property owners about the increases and a public hearing requirement. Heldmaier said the process would likely take place throughout the next three months.