The Marin Municipal Water District plans to raise rates across the board for its customers starting next year, a move prompted by revenue shortfalls due to consumption cutbacks and a reexamination of the district’s rate structure in the wake of a lawsuit.

The increase will take effect on Jan. 1, 2016, and all rates, fees and charges will again be raised by an additional four percent on May 1. 

For the majority of users, the bimonthly fixed service charge—which depends on the size of a customer’s meter—will increase from about $21 to $26. Customers will pay another $5 extra to fund improvement projects to the district’s water sources. 

“What has been recognized for quite a few years is that water utilities need to create a more secure financial model,” said Larry Bragman, San Geronimo Valley’s representative on the district’s board of directors. “When you are running a water utility and you are selling less water, and if your revenue is based on the volume you sell, you find yourself in a paradigm conflict.”

Historically, the district has tied its rates to the amount of water that customers use per month, while around 80 percent of the district’s maintenance and staffing costs remain fixed. But the state’s ongoing drought and the push for conservation have dropped water consumption—and, correspondingly, revenue. With a higher fixed service fee, the district intends to stabilize its revenue.

Meanwhile, as base rates increase for all water users, customers that use large amounts of water may see their bills go down slightly. That’s because the district is tweaking its tiered rates—which charge more per unit of water for greater use—to more accurately reflect the actual costs of providing water, and the high rates for the top tiers will be somewhat less expensive. 

In April, a Southern California appellate court ruled that an Orange County water district had violated state law by failing to show that its tiered rates were tied to the costs of service, rather than as an arbitrary amount intended to discourage heavy water consumption. M.M.W.D. was slapped with a similar lawsuit in June, brought forth by a San Francisco-based law firm.

“I think when [the law firm] see the adjustments, they’ll see that there is actually an empirical basis for the tiers,” Mr. Bragman said. “There’s definitely financial and mathematic cost-adjustment justification for the tiers.”

Additionally, the increased rate will include a new fee to fund watershed improvement projects, including habitat restoration for young salmon populations lounging along the banks of Lagunitas Creek. Mr. Bragman said the district plans to embed woody debris at the creek’s lower regions near the Inkwells and raise the creek bottom to spread the water out to adjacent creek banks.

The plan also includes the option to levy a drought surcharge in times of emergency as well as a pass-through charge if prices are raised by Sonoma County to draw water from the Russian River, which makes up around 25 percent of the M.M.W.D.’s supply.