Politics & Government

Novato Water Rates Proposed to Jump 33 Percent Over 3 Years

North Marin Water District cites rising costs, capital projects and lower water sales as reasons for needed rate hikes. The board vote is set for May 24.

Five weeks after it sent a letter to Novato customers about proposed rate increases, the board is publicly hashing out details of the proposed boost that averages 11 percent for three consecutive years.

The NMWD board, which meets at 7:30 p.m. Tuesday night (agenda attached), is one week away from voting on the increases. The district has cited higher water costs from Sonoma County sources, reduced water sales, declining financial reserves and an aqueduct improvement project north of Novato as the reasons behind the proposed hikes.

The typical single-family home would see its water bill increase by $5 in the first year, $5.20 in the second year and $5.80 in the third year, according to NMWD. By June 2013, the increases would add up to $162 more on an annual bill.

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District General Manager Chris DeGabriele said 67 letters of protest about the increases had been delivered as of Friday.

“Nobody has a desire to raise the rates, but we feel we have to. It’s the position we’re in,” DeGabriele said. “It’s not just going on here; it’s happening throughout California. We would like to see some warm weather so folks would use some more water.”

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He said an 11 percent sounds like a lot, “but if you’re a conservative user of water, it’s not going to break the bank. At the same time, we need to have a reliable source of revenue to provide our service to the customers.”

In the April 8 letter to customers (see atached), NMWD said its rates remain reasonable and that the typical bill is below the median of similar water agencies. A comparison charge is available at www.nmwd.com.

Eighty percent of Novato’s water supply comes from Sonoma County sources and it is delivered through the North Marin Aqueduct that runs parallel to Highway 101. Caltrans has embarked on a highway widening project, and the parallel aqueduct is being enlarged between Kastania Road to the Redwood Landfill. NMWD’s obligation is about $8 million, and construction is expected to start about a year from now.

NMWD has plans to get Russian River water delivered to Novato without pumping, eliminating the Kastania Pump Station near the Marin-Sonoma county line just south of Petaluma.

The water district plans to borrow the $8 million to finance the project, causing NWMD’s first bond debt since 1986. Before the financing is sought, the district says it needs to convince rating agencies that it has the ability to pay back the loans, and enacting the increases before going to market will boost its credit rating and reduce overall costs.

The district’s finance officer, David Bentley, has told the water board that financial reserves total 44 percent of operating expenses, less than half of what he recommends. The district expects to have a deficit of $700,00 at the end of this fiscal year, and the proposed operations budget for 2011-12 projects a net bottom line deficit of $269,000, Bentley said at a recent meeting.

The district points to personnel reductions and a slowing of internally funded capital projects whenever it is accused of irresponsible spending. The workforce has been cut by 10 percent (five positions) in the past two years and money for new projects has been trimmed by 25 percent. This summer, half of its water conservation rebate budget will get the ax.

“We have a long-range master plan that looks at projects that need to be implemented,” DeGabriele said, “and those projects are being pushed out to reduce costs.”

To learn what the increases would mean to you, click here


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