Like many other public agencies, the District is facing several challenges in its operations: aging infrastructure, new and increasingly restrictive regulatory measures, drought and more. The cost of operating, maintaining and replacing facilities exceeds the revenue from current rates.
Just like most other services, utility costs rise over time. Furthermore, inflation has increased operational costs. The District is also working with a system of wells and distribution infrastructure that dates back 70 years—requiring significant maintenance. Additional revenue is needed to fund critical operations, maintenance, repairs, debt payments, infrastructure costs and capital improvement projects.
About the Rate Study
The District is currently going through a rate-setting process to determine the increases to rates that will be necessary to meet near-term (5-year) utility needs. Rates must comply with state law, which means they cannot exceed the reasonable cost of providing water service, can only be used for utility-related expenses and cannot be used to subsidize other ratepayers.
The District will be hosting a workshop and a public hearing to solicit feedback during the rate-setting process. Meeting information will be updated when available.
- Completed - Community Workshop – August 21 at 6 p.m.
- El Camino Fundamental High School Cafeteria, 4300 El Camino Ave.
- Public Hearing – September 18 at 6 p.m.
- El Camino Fundamental High School Cafeteria, 4300 El Camino Ave.
Resources2023 Water Rate Study - Approved.pdf
- Water Rates Effective November 01, 2023
- Ordinance No. 2023-01 Adopted Water Rates (Effective 11.01.2023)
- Resolution No. 23-0918 - Ratifying Results of Proposition 218
- 9/18/2023 Rate Hearing Presentation
- 8/21/23 Community Workshop Presentation
- 7/17/23 Bartle Wells Presentation
- Notice of Objection Ordinance
- Proposition 218 Notice
- Written Objection Form
- FAQ Mailer
The District relies on customer water rates as the revenue source to operate and maintain water supply service. As a public agency, the District cannot profit from what it charges to provide water service. The District only charges the actual cost of the services provided.
The District maintains two budgets: an Operations & Maintenance budget and a Capital Improvements budget. The Operations and Maintenance Budget includes expenses associated with daily operations and is funded by Residential Flat Rate Fixed Charges, Commercial Fixed Meter Charges and Commercial Volumetric Charges. The Capital Improvements Budget is allocated towards pipeline and well improvement projects identified in our master plan and is funded by the Capital Improvement Plan Charge (formerly known as the System Maintenance Charge) on customer bills.
The District has rights to both groundwater and surface water within our region, allowing us to utilize local supplies rather than expensive imported water. However, there is currently no infrastructure in place to gain independent access to surface water sources. In order to ensure continuing water supply in normal and drought conditions, and increase the District’s self-sufficiency, investments in infrastructure are necessary.
The funds generated by water rates are used to provide safe and reliable drinking water for our residents and businesses. This money funds operations, maintenance, repairs, debt payments, infrastructure costs, and capital improvement projects. The District’s 2018 rate increase only applied to operations and maintenance, and not capital costs—addressing only a portion of the District’s financial needs.
Current rates are inadequate to properly maintain or replace vital aging infrastructure, including facilities, equipment and pipelines. Some essential facilities have either failed or are reaching the end of their useful life, which adds further strain to the remainder of the system. Failing to maintain aging infrastructure impacts water supply reliability, poses a potential public health risk, and subjects the District to possible regulatory violations.
In addition, the District must also comply with strict environmental regulations and state-mandated water conservation to maintain adequate water supply and reliability. These compliance efforts have increased the cost of providing water.
The District will use funds to pay for critical improvements and infrastructure, both necessary for the provision of safe and reliable drinking water for the ratepayers in this community. Increased revenue will help to advance essential capital improvement projects, including the rehabilitation of two wells and replacement of key pipelines.
If this rate increase does not pass, the District will not have sufficient funds to address critical infrastructure repairs and overdue maintenance needs that are essential to providing reliable water service.
As a result, the District may lose autonomy and control of its functions. While consolidation with another public agency is not guaranteed, it is probable that the Sacramento Local Agency Formation Commission (LAFCo) will reevaluate the District’s viability to maintain its independence. This information is based on the grand jury report and Municipal Services Review conducted by LAFCo.
The District retained a professional independent consultant, Bartle Wells Associates, to analyze and prepare the proposed rate study, in consultation with legal counsel. Bartle Wells is a public finance consulting firm that is familiar with the District’s history and needs. The rate study details the District's obligation to address significant infrastructure needs and provides a detailed rate and cost of service analysis. In addition, it shows the need for rate increases to account for basic inflationary operating cost increases and higher ongoing costs associated with maintaining the aging well infrastructure.
The District is aware that any rate increase is difficult for our customers. Leading up to this proposed rate increase, the Board has pursued alternative avenues to raise revenue without burdening ratepayers. For example, the District has researched and applied for State grants to contribute to capital improvement projects—and will continue to do so.
Despite this, additional funding is needed for proactive maintenance and upgrades. These will likely reduce long-term expenses by increasing the lifespan of infrastructure and avoiding unexpected, costly replacements.
In any event, and under any scenario, ratepayers must pay for the actual cost of water service—regardless of whether that water is provided by Del Paso Manor Water District or another neighboring water district. However, private water districts have different and possibly fewer legal constraints, so it is possible that rate payers could pay more if the District privatized.
As of April 2023, the District is projected to complete the "218 Proposed" CIP improvements listed below with revenue from the rate increase.
An objection form is different from a protest. An objection form is part of the objection ordinance process, which offers ratepayers the opportunity to protest how the rate study was conducted and how the numbers were identified. The rate study protest is focused on the rates themselves and has no specific form; ratepayers can send in their protests by following the instructions below.
Only one written protest per affected property may be counted. Written protests must be received by District staff at 1817 Maryal Drive, Suite 300 or via email to 2023WaterStudyComments@DelPasoManorWD.org prior to the conclusion of the public hearing on Monday, September 18. A written protest must identify:
1. The physical address of the affected property
2. The account number and/or Assessor’s Parcel Number
3. The proposed rate(s) being protested
4. The printed name of the property owner or ratepayer protesting
5. The signature of the property owner or ratepayer protesting
Telephone, fax protests or submissions through the district website will not be accepted.
We project that the CIP charge increase will generate $2,181,352 in additional revenue over the 5-year period. We project that the O&M charge will generate $3,641,900 in additional revenue over the 5-year period. In terms of percentages: CIP revenue would account for 37.5% of all revenue, and O&M revenue would account for 62.5%.
Yes, all DPMWD Directors live within the District’s service area.
AB 2572 (2004) requires certain urban water suppliers to install water meters on all municipal and industrial service connections within its service area by January 2025. AB 2572 defines “urban water supplier” as a municipal water supplier that services over 3,000 customers or supplies over 3,000 acre-feet of water per year. (See Water Code sections 528(c) and 10617).
The District does not have over 3,000 customers or supply over 3,000 acre-feet of water per year. Therefore, the District is not subject to AB 2572’s requirements to install water meters by January 2025. However, the District is subject to SB 552 (2021), which requires small water suppliers, including the District, to install meters by 2032. Thus, while installing meters will be within the District’s 10-year plan, the capital costs of installing meters is not covered in the proposed rate increase.
Bartle Wells arrived at the numbers in the rate study through surveying nearby utilities and looking at similar account types (i.e. residential, commercial, industrial).
This proposed rate increase would end in five years. By law, the District’s proposed rates may not exceed a period of five years. After five years, a new rate study would be completed if needed and a new Prop 218 process would ensue. No additional projects will be added to the current list of capital improvement projects adopted as part of the current rate study.
If approved, this rate increase would impact rates for five years, starting on November 1, 2023.
The District researched and applied for State grants to contribute to capital improvement projects—and will continue to do so. Additional revenue will increase the likelihood of securing grant funding, as many state and federal grants require a certain financial commitment or match from the District in order to qualify for assistance.
Under any scenario, ratepayers must pay for the actual cost of water service and capital improvements—regardless of whether that water and the improvements are provided by Del Paso Manor Water District or another neighboring water district. If the District was consolidated with another water provider, ratepayers would likely still bear financial responsibility for infrastructure improvements affecting their service.
Preserving the District’s independence ensures that the needs of local residents remain a top priority and allows ratepayers a greater voice in their future.