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Marin Municipal Water District seeks rate hikes of up to 20%

Marin Municipal Water District seeks rate hikes of up to 20%

Most Marin Municipal Water District ratepayers could see their water bill costs increase by 20% this summer under a proposed rate plan released this week.

The proposed rate hikes under the four-year plan are significantly larger than those approved in recent decades. District staff and governing board members said the increases are necessary to address several pressing priorities and challenges the utility faces in the aftermath of the recent drought.

These include balancing the utility’s finances after a reduction in water sales, saving to secure new sources of water to weather future droughts and addressing a backlog of maintenance for the water supply system.

“We need to make some changes, not just with adjusting for the cost of inflation. That would be so simple in many ways,” district board president Monty Schmitt said during a presentation of the rate plan on Tuesday. “We are really addressing a number of different challenges that are facing the resiliency of our district to be able to meet our core mission of providing safe and reliable and affordable water supplies to our community.”

“We are really making a really big swipe and a big stride at taking care of a lot of the problems that have existed for a while and not kicking the can down the road,” board member Matt Samson said during the meeting.

A public hearing on the rate changes is being scheduled for May. If adopted, the changes would take effect July 1.

Board members and staff said the new rate model encourages conservation. While a median single-family home would have a 20% cost increase on its bimonthly bill during the first year, customers with the lowest water use would see an increase of about 9.6%.

“To be clear for our customers, what we are asking them is to follow the climate,” board member Jed Smith said during the meeting. “Climate change is the driver here. And as drought kicks in, use less water and your bills won’t go up as much. That’s the clear message.”

For about half of the district’s single-family home accounts, bimonthly bills would increase by about $28 during the first year depending on the water use. Customers who use more water could see bimonthly bill charges increase by $75 or even $220 for the largest water users. By comparison, customers who consume low volumes of water would only see their bimonthly bills increase by about $10.

The district plans to put a rate calculator on its website to allow residents to see how their bills would change under the plan.

The first year would have the largest spike in rates, with the increases being comparatively lower in the following three years.

The plan seeks to overhaul several aspects of the rate and fee structure.

The district charges water rates under a four-tiered structure based on a customer’s water use. Customers who use more water are bumped into tiers with higher rates. The proposed plan would lower the threshold for when customers are bumped into a rate tier with higher prices, meaning some customers in a lower-rate tier could be bumped into a higher-rate tier beginning this summer.

To make up for reduced water use sales during droughts, the plan would allow the district to add a drought surcharge to rates. The utility also plans to eliminate seasonal rates, which allowed customers to use more water during the summer months when water use is at its peak without being bumped into a higher-rate tier.

Additionally, the district is proposing to lower the proportion of fixed fees ratepayers pay on their bills.

The district will continue to provide discounts to low-income water users.

“Equity and affordability are really critical here,” board member Larry Russell said during the meeting. “We need to be very careful that we’re thinking about the entire community when we’re looking at these kinds of rate increases.”

Members of the public who attended the meeting on Tuesday had mixed views on the proposed overhaul.

“I think this is more fair and rewards conservation,” said Mimi Willard, president of the Coalition of Sensible Taxpayers, a nonprofit organization.

Larkspur resident James Holmes told the board that the “staggering” rate increase could come as a surprise to many ratepayers, especially as the district has yet to decide which new water supply options it will pursue.

“I can’t help but think that many ratepayers confronted with a 10% to 20% or greater increase will think that the board has put the rate increase cart before the supply increase horse,” Holmes said.

The district, which serves 191,000 central and southern Marin residents, faces a $20.7 million deficit in the 2023-2024 fiscal year. Bret Uppendahl, the district finance director, said the shortfall is the result of several factors, including inflation and a sustained reduction in water sales from the drought.

“We’re not expecting any kind of miracle rebound in our water consumption,” Uppendahl told the board.

With no changes to the rates or rate structure, the deficit would continue to climb each year until it reached nearly $38 million in 2026-2027, according to staff projections. Under that scenario, the district would need to continue to draw down its emergency reserve fund, which would be depleted in the 2024-2025 fiscal year, Uppendahl said.

“Each year throughout the four-year rate cycle, we’d fall farther behind,” Uppendahl said.

The rates are meant to make up for these losses while also rebuilding the district’s emergency reserve fund, which has about $24 million. The reserve fund was about $60 million at the start of the drought in 2020.

After the recent drought put the district at risk of depleting its seven local reservoirs as soon as mid-2022, the district completed a yearlong study of new water supplies. Earlier this month, the district produced a list of supply options to pursue or study in the coming years, including expanding reservoir storage capacity, bolstering conservation programs and installing a brackish desalination plant on the Petaluma River, among other ideas.

Under the four-year plan, the district has targeted funding for projects that could be completed in the near term while saving up for more costly and complicated supply projects in the future.

The initiatives that could be funded under the plan include a $6.4 million project to connect the Soulajule Reservoir to the electric grid, which would allow the utility to pump water out without generators, as is currently required.

Another $4.4 million would go to create a permanent connection from the Phoenix Lake reservoir to the nearby Bon Tempe treatment plant. Phoenix Lake is only used during dry periods and requires portable pump stations to transfer water to the treatment plant. The process can take about a month to complete before the water can be drawn.

Other proposed investments include $6.8 million for conservation programs; $9.6 million to import more Russian River water as needed, especially during the winter months; reserving $10 million for future water supply projects; and $10.9 million to begin studies and predesign of new supply projects.

Responding to board member concerns about committing to these exact dollar figures, Uppendahl said the financial plan does not bind the district to spend this much in each category.

“This does not tie our hands in any way,” Uppendahl said

Additionally, the district proposes to spend $30 million to address a backlog of maintenance in its water system; $10.4 million on debt service for larger, critical repair projects; and $10.7 million toward installing wireless water meters and associated software. Another $2 million would go toward reducing fire fuels in the watershed and $800,000 toward ranger positions, among other investments.

More information about the rate plan can be found at


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