By Don Zdeba
If you are a customer of the Indian Wells Valley Water District (“District”) you no doubt have seen an increase in your bill over the last year and a half. Comments to our staff as well as comments posted on various social media indicate a possible lack of understanding of the various charges that comprise a District bill. In the space allotted me I will endeavor to explain each of those charges.
District revenue primarily comes from two sources; the Ready to Serve Charge and the Usage Charge. The Ready to Serve Charge is determined by the size of your meter and increases with meter size to cover the District’s fixed expenses, excluding interest. The standard meter size for residential customers is ¾”. The Ready to Serve Charge essentially means you have a safe, reliable water supply available to you on demand. It is intended to ensure a reliable monthly revenue stream to cover District fixed costs such as electricity, chemicals, wages and benefits, regulatory compliance including required system sampling and reporting, and operation and maintenance of the system infrastructure. That infrastructure includes eleven production well pumping plants, eleven storage tanks, six booster stations with redundant pumps, and hundreds of miles of transmission and distribution pipelines. The District cannot rely solely on the Usage Charge because it is influenced by customer behavior and can be highly variable. The District currently relies on the Ready to Serve Charge for 60% of its revenue and the remaining 40% on the Usage Charge. Past experience has proven too much reliance on the Usage Charge can have unintended consequences. Several years ago when customer reaction to conservation measures exceeded expectations, the District had to reduce staff by 25% affecting the ability to maintain a high level of customer service.
The Usage Charge is currently billed on a four-tiered rate system. Usage is billed in units called hundred cubic feet (HCF). Each HCF is 748 gallons. As water usage increases during the service period, the cost per unit increases per the tier structure. Tier 1 ranges from 0 to 9 HCF and is intended to provide water for basic health and safety needs plus some evaporative cooler use. Tier 2 is from 9.01 to 24 HCF and is intended to provide water for outdoor desert adapted landscape. Tier 3 is from 24.01 to 45 HCF and is intended to provide water for irrigation of turf. Tier 4 is excessive use over 45.01 HCF. So your bill will increase significantly should usage enter Tiers 3 and 4.
The Arsenic Compliance Charge is the result of the 2001 regulatory requirement by the Environmental Protection Agency to reduce arsenic content from 50 parts per billion (ppb) to 10 ppb. on the basis of bladder and lung cancer risks. 10 ppb is roughly equal to 5 teaspoons of ink in an Olympic-sized swimming pool. Because four of the District’s production wells in two separate areas exceeded the 10 ppb, compliance required construction of two Arsenic Treatment Plants to remove the arsenic at or below the 10 ppb Maximum Contaminant Level (MCL). Construction of the two plants was initially financed through a $15,500,000, 30-year bond. It has since been refinanced and is scheduled to be paid off in 2048. Again, this is a fixed monthly charge determined by the size of your meter. It is charged to cover the District’s debt service and operating costs for the two arsenic treatment plants.
The District has five pressure zones: A (lowest), B, C, D and E (highest). The majority of our customers are in the A Zone. Each zone above the A zone represents an increase of approximately 100 feet in elevation. This charge is applied to recover the cost of electricity and operation of the pump stations incurred to boost water to customers located in higher elevations. These charges are assessed on billable usage.
Finally, your bill includes a line entitled “GA Fees”. Due to limited spacing available on our bill, the total listed includes the Groundwater Extraction, or “Pumping”, Fee, and the Replenishment Fee. The Groundwater Extraction Fee, adopted by the Indian Wells Valley Groundwater Authority (“GA”) by way of Ordinance 02-18 on July 19, 2018, requires non de minimis pumpers within the basin, those pumping more than 2 acre-feet for domestic purposes, to pay a fee for each acre-foot (approximately 326,000 gallons) of water they pump. The fee was initially established at $30 per acre-foot but was subsequently raised to $105 with approval of Ordinance 02-20 effective September 1, 2020. This fee is charged to District customers at the rate of $0.24 per HCF of use.
The Replenishment Fee that became effective January 1, 2021 was established by the GA with Ordinance 03-20 approved August 21, 2020. This fee applies to all groundwater pumpers within the basin, except for Federal and de minimis pumpers, that exceed their allotted pumping provided within the Ordinance. The fee is set at $2,130 per acre-foot. The fee is comprised of $2,112 toward the purchase of an imported water supply and $17.50 for mitigating damage to shallow wells. Based on District pumping and consumption data from 2021, this fee is set at $1.65 per HCF. The two fees combined amount to $1.89 per HCF for District customers. I do want to emphasize the fees enacted by the GA are not a source of revenue for the District, but rather, are passed on to the GA.
Also, the 3% rate increase implemented July 1st was the last of five 3% increases authorized by the 2018 Water Rate Study conducted by the District. As such, a new rate analysis is in progress to determine the rates required to meet the operating and capital needs of the District in the coming years. The goal is to complete the analysis by the end of this year.
You can find detailed information on charges and rates on our website at https://www.iwvwd.com/wp-content/uploads/2018/12/Ordinance-No.-104-Final-Water-Sales-and-Service-Manual-eff-01-01-2019-1.pdf. However, should you ever have a question about your bill, please contact Customer Service at (760) 375-5086. It is important that you understand all that goes into delivering a safe, reliable water supply to your home or business.