Proposition 218

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2016.12.12 Regular Board Meeting

Board action was taken at the regular meeting on December 12, 2016, to adjust the initial rates proposed in the Prop 218 notice to a lower percentage of 3%. The Board voted to take other action, Option 2; Scenario 4 as detailed in the agenda item summary.

2017-2018 Operating Budget and 2017-2021 Financial Plan

Rate Tables

 
  2017
 2018 2019
2020

2021 Projected
Not Adopted

Water
 3%   3%   3%   3% 3%
Wastewater  3%  3%  3%  3% 3%
Recycled Water
 3%  3%  3%  3% 3%
 

 

 


Attention EID Customers or Owners of Affected Property

prop218_November2015_final-web-1

This website serves to reflect the Proposition 218 notice that was sent to EID customers detailing the proposed new rates for water, wastewater, and recycled water services, as required by Article XIII D, Section 6, of the California Constitution (Proposition 218). Click here to view a copy of the notice, or click on the image at right.

The El Dorado Irrigation District (EID/district) Board of Directors will consider the rates during a public hearing that will be held at 9:00 a.m. on January 11, 2016, at the El Dorado Irrigation District headquarters located at 2890 Mosquito Road in Placerville.

If adopted, the first increase would take effect February 1, 2016. All subsequent increases would be effective on and after January 1 of each year beginning January 2017 through January 2020.

Read some frequently asked questions about the Proposition 218 process.

Reasons For The Rate Increases

EID is committed to providing safe, reliable, and high-quality water, wastewater, and recycled water services for our customers. To meet this commitment, the District develops regularly updated long-term financial plans that are designed to ensure there are adequate funds to make the necessary infrastructure investments to maintain safe and reliable service. This is done by striking a balance between funding infrastructure through current cash flow (pay-as-you-go) and the need to borrow funds for more costly projects.

As our water, sewer, and recycled water systems age, it is important to continue investing in replacing, rebuilding, and expanding them in accordance with a long-term, balanced financing plan.

Based on the most recent board-approved financial plan, it has been determined that rate increases are necessary for EID’s water, wastewater, and recycled water service fees to enable the District to recover current and projected costs of operations and maintenance; fund capital infrastructure improvements vital for providing safe and reliable drinking water; maintain the operational and financial stability of the utilities; and avoid operational deficits and depletion of reserves.

The proposed rates are designed to bring in the revenue needed to cover operating expenses and meet debt service obligations for vital capital projects.

The proposed rate increases are detailed on pages 2 - 4 of the Proposition 218 notice.

 

What are debt service obligations?

As noted above, rates help pay for the district’s debt service obligations, which we incur when we have to fund millions of dollars’ worth of capital improvements to continue to provide high-quality water and wastewater services. Many of the improvements are the direct result of ever-changing state and federal regulations.

We finance long-lived (50 to 100 years) capital improvement projects much like homeowners who borrow money to finance their homes and then pay interest and principal on the loans. In 2016, EID plans a water bond issuance of approximately $49 million to rebuild or replace vital infrastructure (see below under "Needed Infrastructure Reinvestment" for more details) to provide safe and reliable drinking water. We issue bonds to cover our capital costs and pay the principal and interest from revenues. But we are held to stricter financing standards than most home mortgages. We have a legal obligation to ensure that our net revenues exceed our debt service costs by 25 percent each year.

What’s included in operating expenses?

The major components of operating expenses are labor, services/material costs, and regulatory fees.

Labor: A variety of EID employees work daily to provide our customers with the best service possible. Operators run the water and wastewater treatment plants and water delivery and wastewater collection systems. Construction and maintenance crews replace and repair pipes and other infrastructure. Recreation staff manage our recreation facilities. Office staff answer your billing and service-related questions. Engineers design and oversee construction projects. Environmental analysts keep the district in compliance with a multitude of state and federal regulations. Financial staff keep the books and conduct long-term financial planning. Information technology specialists construct and manage sophisticated electronic systems. Water efficiency specialists conduct water audits and administer rebate and discount programs for water conservation devices.

Non-labor expenses include water charges, regulatory fees, and the costs of chemicals, energy to run all facilities, gasoline, and diesel fuel for emergency generators. We must also install new pumps when old ones fail and replace aging or failing pipelines and segments of our canal system to reliably convey water, wastewater, and recycled water.

EID has aggressively controlled costs and reduced staffing from 305 in 2009 to 211 in 2015—a 30 percent reduction.

Small Farm and Ag users with Residence rate change

EID has reviewed water usage since the rates and rate structure were put in place in 2012 and is now recommending a rate change for small farms and agricultural users with a residence. EID staff is proposing and the Board directed that small farms and agricultural users with a residence be charged residential usage rates for both Tiers 1 and 2 as originally proposed by the District’s cost-of-services (COS) committee on March 14, 2011.

Currently, 76 percent of single-family residential customers are billed for usage up to Tier 3. District staff believes it would be appropriate to implement the Tier 2 residential rates for the small farm and agricultural users with residences because residential usage for small farms and agriculture with a residence is similar to single-family usage. Usage above Tier 2 for small farms and agricultural users with a residence would stay at the agricultural rates following the COS principles.

How do EID rates compare with other water and sewer utilities?

The following charts (see higher quality images in Proposition 218 notice) show how EID rates compare with other utilities in the region for typical residential water use and residential wastewater services. The calculations in the charts include the base charge plus the commodity charge for the water used. PLEASE NOTE: All amounts are for two-month bills. Monthly amounts are half of what is shown.

WaterComparisonCharts_2016

 

A note about wastewater treatment. We’re often asked why sewer bills seem high. Quite simply, it’s costly but absolutely necessary to collect, treat, and safely reuse or dispose of wastewater.

Today’s extremely finely-tuned technology means that contaminants in treated wastewater are now measured in parts per billion (one-half teaspoon per Olympic-sized swimming pool). The resulting discharge regulations grow ever more stringent, which requires costly upgrades to wastewater treatment plants.

In the mostly rural Sierra foothills, the costs seem even higher. Cities like Sacramento and San Francisco are able to discharge into larger rivers or the ocean, and they receive dilution credits that help keep their regulatory costs lower.

That’s not possible in the foothills. EID has been required to treat its wastewater to “tertiary” (near drinking-water) standards for over two decades. And in many foothill counties, like El Dorado County, there are far fewer customers to share the costs.

Needed Infrastructure Reinvestment

Esmeralda Tunnel: $6.1M
In September of 2014, a partial collapse of the Esmeralda Tunnel necessitated emergency repairs. This rebuilding project will restore the reliability of water supply and power generation for up to 100 years.

Forebay Dam Modifications: $19M
Forebay dam modifications are necessary to satisfy federal and state regulatory requirements. This project will include safety improvements and increase storage capacity. The project increases emergency drinking water storage from less than one day to six days. Increased hydroelectric revenue from the storage (approximately $300,000 per year) will help offset capital costs.

Main Ditch Piping: $6.0M
Piping the Main Ditch—currently an open earthen ditch—will minimize water loss, adding up to 1,300 acre-feet of usable supply. The pipe will also protect water quality and help save money on maintenance and treatment processes.

Flume Replacement: $11.6M
Flumes are a vital component of EID’s water system. Rebuilding dilapidated flumes in the District’s Project 184 delivery system will enhance water supply and power generation reliability. Necessary flume replacement significantly reduces the risk of catastrophic failure, and enhances EID’s ability to transfer and bank water in Sly Park's Jenkinson Lake during times of drought. New flumes should last 50 years.

Sly Park Intertie: $6.6M
This pipeline project increases the reliability for delivery of one-third of EID’s water supply by interconnecting two major water treatment facilities. Refurbishing this 40-year-old artery allows the district to optimize water supplies during drought conditions and increase power generation revenues.

How to protest the proposed new rates

pullquote2Under Proposition 218, the owner of record for a parcel(s) that is subject to the proposed rate increases can submit a written protest against the proposed rate increases received by the District at or before the time set for the public hearing.

If a majority of affected property owners submit written protests, the proposed rate increases will not go into effect and the reconstruction work on the infrastructure will be impacted. 

The written protest must identify the parcel(s) in which the party signing the protest has an interest. The best means of identifying the parcel(s) is by the Assessor’s Parcel Number (APN). If the party signing the protest is not shown on the last equalized assessment roll of El Dorado County as the owner of the parcel(s), the protest must contain or be accompanied by written evidence that such party is the owner of the parcel(s), unless the protest is by a tenant who pays the utility bills.

In rental situations where the tenant pays the utility bills, the property owner is responsible for supplying the tenant with this notice. Tenants who pay the utility bills can submit a written protest. One written protest per parcel will be counted.

Please mail or hand-deliver written protests (specifying which rate increases are being protested) to: Clerk to the Board, El Dorado Irrigation District, 2890 Mosquito Road, Placerville, CA 95667.

Emailed, faxed, or electronic protests will not be accepted.