Department of Water Resources
A daily compilation of significant news articles and comment
March 4, 2008
5. Agencies, Programs, People
NID 2008 Water Rates Will Increase, But Five-Year Plan Scrapped
YubatNet.com – 3/3/08
By Susan Snider
Following a lengthy and tumultuous public hearing at NID's Feb. 27 Nevada Irrigation District board meeting in Grass Valley, NID directors in a contentious 3-2 vote approved rate increases for both its treated and raw water customers.
However, the decision to increase rates will only apply to 2008.
Pressured by disgruntled NID customers present at the board meeting, directors voted against the originally proposed resolution which called for increases phased in over the next five years.
A majority of the public who protested the increases were ranchers and other agricultural interests, many longtime customers of NID.
The cost of providing water
In accordance with Prop. 218, NID embarked on a cost of service study in 2007 which indicated that the district's rates fall substantially below the cost of delivering water to its customers.
Treated water rates cover roughly 58 per cent of the cost of service.
Raw water rates fall even shorter at 44 percent.
NID subsidizes rates predominantly through property tax revenues. But with the downturn in the housing market and increased demands for capital improvements throughout the district, NID faces additional financial challenges.
And rate increases are a reality of providing water. However, according to Alex Handlers of Bartle Wells Associates, the consulting firm hired by NID to assist in preparing the cost of service study and a ten-year financial plan, the district's rates are still among the lowest relative to other agencies.
Handlers reminded the board and members of the public that the mandatory Prop. 218 notices sent out to customers concerning the proposed rate increases show only the maximum NID can charge.
He also emphasized that future increases would be subject to yearly review and board approval.
Nevertheless, this news failed to pacify water users present at Wednesday's meeting. Most insisted that the proposed increases were unfair, onerous, and would threaten their survival.
A questionable future for some
"Ranching is not a job, it is our life," Darryl Sanford told NID directors.
"If water increases go the way NID is proposing, our ranch will begin losing money,"
Fourth-generation rancher Darrell Oest of
His comments spoke to a potentially bleak future for agricultural interests in
"These increases will put me out of business," Oest flatly said.
While NID's proposed rate schedule showed average rate adjustments of 6.5 percent after 2008, some larger raw water users faced increases of 15 percent or more.
Rancher and Division 4 director Paul Williams said he objected highly to the rate increases.
"Everyone of us on the board, we empathize with you," Williams told the protesters.
Division 3 director Scott Miller responded to fears that agriculture will be driven out of
"We should give agriculture a break, but at the same time Prop. 218 says we must be equitable."
Directors Williams and Miller voted against the scheduled rate increases.
Increases hit small and larger users harder
According to Handlers, some NID customers fall disproportionately further behind the cost of service scale than others. Therefore, these water users would experience higher rate adjustments than others.
And large raw water agricultural users would see the biggest change in their rate structure.
But Handlers also pointed out that at the end of the five year phase-in period, NID's water customers would be on the same fixed and variable rate structure. This would make NID's rate schedule more equitable for all water users.
"NID is moving to rates at a common basis," Handlers said. "The ones at the lowest and highest flows will experience the highest increases, but ultimately will be caught up and on the same basis with other customers."
This explanation didn't satisfy people like John Corbett of
"I realize increases are allowed," Corbett conceded. "But this is a shock for people on fixed income, pensioners. And with big users, some of those guys will throw in the towel."
Retiree Lance McCray of
Rate increases and the process of notifying customers
According to NID Finance Manager Marie Owens, all property owners who receive district water were notified by mail of the proposed rate increases. Tenants of these same property owners were also sent rate adjustment notices.
"The way Prop. 218 is written allows property owners and tenants to protest," Handlers added.
A copy of the notice stipulated that for a protest to be counted it must be in written form and submitted by the date of the public hearing on February 27. But several of those in attendance voiced confusion over the process.
Duane Niesen of Rough and Ready runs cattle on the ranch his family began in 1852. He has experienced numerous rate adjustments over the years but objected to how ratepayers were notified.
"Most of us were not properly informed of the process, it's obscure," Niesen argued.
Lance McCray noted that many people receiving water in his area thought they didn't have a voice and didn't understand the rate increase process.
Others like Larry Parkison of
"I'm concerned that participants have not learned what the parameters of the process are," Hazelwood added. "It is essential that participants know the consequences."
While the number of official protests received by NID was far less than required by law to prevent approval of the increases, board directors chose to implement rate adjustments only for 2008.
Director Miller voiced concerns over the Prop. 218 notification process, adding he was not sure he could support the rate increase because "people were not hearing it right."
NID held two workshops prior to the public hearing for the purpose of explaining the proposed increases to treated water and raw water customers. Combined public attendance for both sessions was four.
If the water district plans to increase rates in 2009, it will be required to follow the same notification process as required under Prop. 218.
Other board response
"I want to do the right thing. We should have agriculture commissions in each county of our district study the affect of the 6 percent cost increase for 2008," said Division 1 director Nancy Weber.
"We need to find out what it really costs you, types of cattle raising, vineyards, orchards, and row crops. I would like to see out of the meeting with the agriculture commission recommendations regarding conservation measures."
Weber also said she would like to find ways other than just property taxes to subsidize rates. She questioned, for example, whether NID's out-of-district rates are "too cheap."
Division 2 director John Drew sympathized with with the agriculture community but maintained that the process is equitable.
"I'm a farmer and my family has been here for years. I'm sensitive to your needs," Drew said to the audience of concerned NID customers. "But the board has always adopted fair rate increases."
On the subject of the notification process, board president and Division 5 Director George Leipzig observed that the board could be confronted with another proposed rate increase and "the same problems here today."
"I hope we learn what we did wrong by not properly communicating with people,"
Other board news
Following closure of a formal CEQA process and in the absence of any substantive public comment, board members approved NID's Loma Rica Transmission Main Pipeline Project.
In addition to bringing water from the district's Loma Rica water treatment plant to
Energy conservation begins at home
Board members also approved a plan for NID participation in a conservation-based program sponsored by PG&E.
The Motherlode Energy Watch Program through the California Energy Commission offers specific services to help cities, counties, and special districts like NID identify ways of cutting energy costs and becoming more resource efficient.
NID seeks alternatives on Combie rehab project
Concerns over cost, environmental issues, project duration, and construction impacts involving improvements to the Combie Phase 1 Canal prompted NID staff to recommend an analysis of project alternatives.
Board members approved the retainer of Black & Veatch Corp. for $210,000 to assess possible alternatives for improving the canal, including retrofitting existing infrastructure and total replacement.
NID Board meetings are normally scheduled at 9 a.m. on the second and fourth Wednesdays of every month. #
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