TUD Water Rates Could Rise

Sonora, CA — Mandatory water conservation measures have already been implemented and now Tuolumne Utilities District (TUD) customers could end up paying more to turn on the tap.

Today, the Tuolumne Utilities District board unanimously voted to hold a public hearing to discuss what the drought is costing the district and to consider proposed amendments to the water rules and regulations. At Thursday’s upcoming hearing, the public will have the opportunity to voice concerns, or protest the idea, of a rate or fee hike.

First today, board members were given an update on the water supply with the recent rains. General Tom Scesa said with the ongoing conservation measures, combined with other current efforts, the district should be able to successfully get through January. 

The Board looked at options to pay for the additional costs of the drought, including the potential implemenation of a base line rate increase of 2.78% for customers, and a commodities fee. Director Kent Johnson questioned whether a flat fee for system services would be fair. The Board wanted to make sure that customers were paying the appropriate amount based upon their total use, while still urging customers to conserve.

Director Ruanne Mikkelsen said, “You really need to make it sting to get people to quit using water in an emergency situation. However, I think about the people who have come up to me and said, ‘we’ve already been conserving, and we started a couple of years ago.’ We are very careful about our water use.” The idea is to avoid penalizing good behavior.

The board voted unanimously for staff to come up with rate and/or fee options that could be reversed when the drought is over. They also requested a plan to develop the Proposition 218 procedure and cost estimates for the board to review and approve.

TUD offered this explanation of the Proposition 218 procedure to the board:

Proposition 218 states that if the District moves to propose an assessment, fee, or new charges it must be submitted to property owners for approval or rejection, after notice and public hearing. Under Proposition 218 guidelines, a letter would need to be mailed at least 45 days before a public hearing is called. The notice must explain what the proposed rate or fee change is and when it will occur. After the 45 days a public hearing is held to allow customers to express concerns or other issues related to the rate or fee change. Additionally, the customers have the right to protest the rate or fee change by mailing or delivering a protest vote on the change. If a majority of the customers vote against the change then it cannot be adopted by the District. The notice for the rate changes can be for a period of time (set years) or for one time.

The last water rate increase that was adopted by the District had a three year inflation factor of 2.78%. One of those inflation increases was rejected by the Board. The other two are available for implementation without another 218 process. The cost of a 218 process can vary widely due to the type of mailing with the cost being as high as $25,000.

The District has not yet received any formal funding yet to deal with the costs associated with the drought. It is unknown when or how much funding we may apply for at this time.

There are two basic ways that the increased costs of the drought and revenue reduction can be addressed. One is to create a fine structure that would penalize customers for water use or misuse. This has both billing and enforcement issues that staff does not think is in the best interest of the District or its customers. The staff’s preferred method is to develop a rate change, which would include a base and commodity change. Because of the broad impact of the drought on all customers and the variability of use, staff recommends developing a base and commodity change to be imposed during Phase III conservation.

The public hearing will be this Thursday, February 13, at 5:30 p.m. in the TUD building at 18885 Nugget Boulevard, off Tuolumne Road in Sonora.