Marin Municipal Water District’s board of directors voted unanimously Tuesday night to approve a rate increase for the majority of its water customers, which includes San Geronimo Valley residents, by around $10 per month starting Jan. 1. The proposal originally included an additional four percent increase scheduled to take effect in May, but it was tabled until the board holds another discussion in April.
The approved changes include the option of charging to all customers a pass-through fee if Sonoma County raises the price for drawing water from the Russian River, which makes up around 25 percent of the M.M.W.D.’s supply. Two other optional surcharges for drought and revenue recovery were put on hold until the April discussion.
Since October, the district has pitched the rate increase as a necessary evil to recoup revenue lost from declining water sales, but critics of the proposal have slammed the district for slapping them with higher rates so soon after being asked to cut back on their water consumption. Many also opposed the proposal on grounds that the district has been spending too much money on operating costs and employee compensation, which some observers have speculated are bloated.
“We should be congratulating you for saving water,” said Richard Owens, a ratepayer. “But this rate increase is a slap in the face.”
This past year, the district claims it lost more than $7 million in revenue, a 10 percent dip brought about by customers cutting back on their water usage during California’s four-year drought and in response to Gov. Jerry Brown’s mandatory 20 percent water-rationing order issued last April. Along with the lost $7 million, the district stated that last year it drew $1.4 million from its rate stabilization fund, and will draw an additional $1.2 million from the fund in the coming year.
According to an analysis prepared by a consultant for the district, the proposed rate restructure would mean that the district would source 28 percent of total revenue from fixed charges—an increase from the current 17 percent and a bump in guaranteed money. The district said the move would convince Standard and Poor’s to maintain the district’s AA credit rating.
“This is a business, not a taxing agency,” said Larry Russell, one of the directors. “We charge for the commodity that we sell: your water. And we have a business that is suffering from a government-imposed 20 percent reduction.”
But of the 32 attendees who spoke at the packed-house meeting, the majority rejected the district’s logic. Many implored the board to hold off on a vote for another month, while others chastised the district for an alleged lack of transparency in adequately informing the public about the rate change. Passing the proposal, these speakers warned, would deal a blow to the public’s trust in the district.
Additionally, several speakers criticized the district’s argument that salaries and benefits for its employees are more or less equivalent to 18 other similar government agencies. They called on the district to compare compensation with organizations from both public and private sectors, in order to gain a firmer grasp on where the district’s employee spending actually stands.
“The pension and retirement funds are just too high,” said Michael Lotito, a founding member of Citizens for Sustainable Pension Plans. “Simply what we’re doing is unstable.”
The district’s general manager, Krishna Kumar, clarified that surveying those 18 agencies is a standard procedure when engaging in collective bargaining agreements. He noted that employee compensation includes not only labor associated with providing water services but also for vegetation management on its watershed lands, which include 22,000 acres on Mount Tamalpais and around Nicasio and Soulajule Reservoirs.
Those duties were on the mind of one San Geronimo Valley resident at the hearing. “I’d like to see 2016 be the year that we do not lose another acre to broom,” said Phil Sotter, of Woodacre. “If that needs more money, I’d ask the board to consider that increase in years to come.”
Though a minority, several attendees praised the district for providing a reliable, relatively cheap water supply. They found the $10 increase to be a small price to pay for living within the district’s jurisdiction.
“Less than a dollar a month to see beautiful views with my family seems like a good deal to me,” said John Hanley, of Mill Valley, referring to the cost per person to pay for one gallon of water from the district. “I don’t know how you did it for so cheap.”
Larry Bragman, a board director, sought to quell fears that the board was bent on making decisions without any concern for public input, citing a provision in Proposition 218—the state law governing how agencies charge fees—that allows the board to revise the rate-restructuring proposal at a later date, if desired. Mr. Bragman urged the board to consider sunsetting the new rate increases after a given time, as well as, if necessary, to revise the rate again to reflect the actual cost of consumption.
“I think we have discretion within [Proposition] 218 to customize what we want to do,” he said. “So it’s not set in stone.”
Regardless of the district’s ability to tweak its rate structure, a couple of directors declared that the ongoing drought conditions have spurred a statewide shift in the way it regulates municipal water agencies. In a sweeping statement, one director, Cynthia Koehler, said that the water district was at fault not for raising rates, but rather for encouraging a longstanding perception that water service is a public right instead of a pricey service.
“We are now moving toward a service,” Ms. Koehler said. “It is no longer about how much water you use. All of us are going to have to change the way we think about what we’re getting.”