The Inverness Public Utility District is seeking to raise its water rates by 15 percent with a new structure that is less dependent on how much water customers use. The rate increase, which is meant to raise operating revenue, would help the district take out a loan to replace two critical yet badly leaking redwood tanks on the Inverness Mesa, called the Tenney tanks.

In addition to the annual $33,000 loan payment, the California State Water Resources Control Board requires that the district set aside at least $6,600 a year to take out a 30-year, $800,000 loan for the project. IPUD’s current three-year budget projections show the district will just about break even. To meet the requirement, the district hopes to raise the basic water charge from $121 to $146 on the bimonthly bill. Usage rates would go up, too, except for customers using less than 50 gallons per day: they would pay only the $146 basic charge. 

The new structure would create more assured revenue that doesn’t fluctuate depending on weather. “Especially this year, where it looks like we may be headed into a drought, we may be having to ask people to cut back on usage in the late summer and fall, and that will affect usage revenue,” Wade Holland, the district’s customer services manager, explained to the board last week. 

Because the basic charge applies to every connection regardless of usage, the new structure would also allow the district to collect more from vacant homes; about half of the homes in Inverness are unoccupied during the week. Budget projections show that 81 percent of the district’s customer revenue would come from the basic charge. 

IPUD raised rates in 2018 and 2019 to pay for critical infrastructure upgrades, including the construction of a new storage tank and water main in Seahaven. At that time, the $100 basic charge went up by $21. 

But it was a mistake to dedicate that increase to specific projects, said director Dakota Whitney, who argued that infrastructure maintenance and replacement should be considered part of a utility’s regular expenses. This time around, the revenue would be spent in any way that supports operations. 

It is the first time the district has increased its rates for that general purpose since 2009. “Historically, we’ve had extraordinarily low water rates, and we have not over time maintained our infrastructure as aggressively as we should,” board president Ken Emanuels said. “Now it’s time to pay the piper.” 

The loan for the Tenney tank replacement would be only the third time the district has borrowed money. In 1956, the district took out a loan to build the district’s office and fire station, and in 1979, it borrowed money to purchase and rehabilitate the water system. 

The replacement of the Tenney tanks with larger steel tanks has been delayed as the district works through funding applications and planning checkpoints. Before construction can begin, Marin County’s planning division must extend the permit, which requires substantial construction before June 14. A spotted owl survey is also required, and the district needs permission from neighboring property owners for demolition access. 

If the rate increase is approved, the state water control board can award the loan based on updated budget projections, and an engineering firm, Brelje and Race, will request bids for construction. The increase would take effect July 1.

“We absolutely cannot allow aging infrastructure at the Tenney site to deteriorate to the point of a potentially catastrophic failure,” the public notice on the rate increase states. A hearing will be held at 7 p.m. on May 27 at the district office. 

This unseasonably dry winter illustrates why the district wants less of its revenue to come from usage rates. This year was the first since 1928—the earliest records in the district’s possession—that it did not rain during February. The closest thing to a dry February came in 1973, when it rained two-hundredths of an inch and a severe drought followed. 

The district’s general rule of thumb is that if stream flows are more than 1 million gallons per day, the system is in good shape; flows are now at half of that.