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2016 Rate Restructure Mailer

2015 Rate Increase (Prop. 218) Mailer

District's Complete Rate Analysis

Rate Restructure FAQ

2016 Rate Restructure

The District’s rate restructure separates fixed rates from volumetric rates for both water and wastewater. It also establishes five distinct customer classifications based on the demands placed on the water and wastewater utility: single-family residential; multi-family residential; commercial; domestic irrigation; and non-domestic irrigation. Since all customers benefit from the pipes, pumps, reservoirs, and future water reliability programs, these fixed infrastructure costs are the same for all customers within their classification and are reflected by the fixed meter charges. The volumetric rates are based on the actual demands placed on the water and wastewater utility and customers are charged per unit of water used. For residential (single-family and multi-family) and irrigation (domestic and non-domestic) customers the volumetric water rates consist of five tiers which results in higher rates as water used increases. Single-family residential and irrigation (domestic and non-domestic) customer’s tiered rates are tied to a “water budget” which allocates a reasonable amount of water based on a particular customer’s needs, such as irrigable area and household size.

This restructure represents the second phase of five adjustments to the water and wastewater rate structure which is scheduled through 2019. Additionally, the District’s water wholesaler, the Metropolitan Water District of Southern California (MWD), announced an increase of $0.04 per CCF (1 CCF = 100 cubic feet = 748 gallons) to the water they sell. This amount will be passed-through to District customers.

 

Fixed Rates + Volumetric Rates = Monthly Water Bill

Fixed Rates

Volumetric Rates

Residential & Commercial
Fixed Water Ratemajority of residential customers ¾ meter
majority of residential customers ¾ meter
+ Fixed Wastewater Rate

Irrigation & Recycled
Fixed Water Ratemajority of residential customers ¾ meter
majority of residential customers ¾ meter

Residential
Volumetric Water* + Volumetric Wastewater
*Single-Family Res. Tiers tied to Water Budget

Commercial
Volumetric Water + Volumetric Wastewater

Domestic Irrigation
Budget Based Tier Rated

Non-Domestic Irrigation
Budget Based Tier Rates

Water Budgets for Single-Family Residential (SFR)

Residential water budgets comprise both indoor and outdoor budgets. Each single-family residential customer will be allocated a reasonable amount of water for their monthly use, split into indoor and outdoor water budgets. At the conclusion of the rate restructure in 2019, each property will have a water budget specific to its irrigable area.

Indoor Water Budget Calculated Using:

  1. Number of persons in a household
    (default of four people)
  2. 55 gallons of water per person, per day
  3. Number of days in the billing cycle

Outdoor Water Budgets Calculated Using:

  1. Irrigable landscape area per parcel
  2. Daily weather (Evapotranspiration, ET)
  3. Evapotranspiration adjustment factor

Residential Water Budget

For residential customers, the rate structure for the volumetric charge has five tiers. Residential customer who stay within their water budget remain in the first two tiers:

Tier 1: Indoor Water Budget
Tier 2: Outdoor Water Budget
Tier 3: 101% to 150% of Total Water Budget
Tier 4: 151% to 200% of Total Water Budget
Tier 5: Over 201% of Total Water Budget

 

Variance Requests for Single Family Residential Customers:

Single-Family residential customers who require more water than the default water budget can submit a request for a variance.  Variances may be given for:  Additional residents; Medical Needs; Licensed Care Facilities; and Additional Landscaping areas.  Variances are effective the date the request is approved by the District and are subject to periodic review.  The variance request form can be completed online digitally (CLICK HERE) or by hard copy (PDF download here).

Water Budgets for Dedicated Irrigation (Domestic & Non-Domestic) Accounts

Dedicated Irrigation water budgets comprise of just an outdoor budget. Each dedicated irrigation account will be allocated a reasonable amount of water for their monthly use, based on the irrigable area served by that irrigation account (meter) and the Evapotranspiration (ET) for the billing period. 

Outdoor Water Budgets Calculated Using:

  1. Irrigable landscape area per meter
  2. Daily weather (evapotranspiration, ET)
  3. Evapotranspiration (ET) adjustment factor

outdoor budget

For irrgation customers, the rate structure for the volumetric charge has five tiers. Irrigation customers who stay within their water budget remain in the first two tiers:

Tier 1: 50% of Outdoor Budget
Tier 2: 100% of Outdoor Budget
Tier 3: 101% to 150% of Outdoor Budget
Tier 4: 151% to 200% of Outdoor Budget
Tier 5: Over 201% of Outdoor Budget

Irrigation Meter Area Change Request Form:

Irrigation accounts must fill out an area change request form (click here) before any adjustments to an account's irrigable area will be changed.  The District will review this request and may require to meet in the field to verify.  Any changes made to irrigable areas become effective the date the request is approved by the District.

Power Surcharge
You may see a line item on your bill called, “Power Surcharge.” Certain customers—residential, commercial, and irrigation—are in areas of the District that require more power to pump water for delivery. For customers in those areas, SMWD applies a nominal Power Surcharge to cover the additional power costs.

See the District's complete rate analysis.

District Efforts to Reduce Impact

The Board authorized use of District rate stabilization reserve funds to ease the transition over the next three years. $4.9 million was authorized for 2015 and an additional $4.2 million was set aside for 2016 to soften the impact of the recently implemented water and sewer fixed-rate charges.
Over the years, the District has worked hard to keep its costs low. For example, despite the fact that service connections in the District have doubled in the last twenty years, the District’s staff has actually decreased- from 165 employees in 1994 to just 128 employees today.
At the same time, SMWD has invested in a number of projects aimed at managing and even reducing costs. Earlier in 2015, the District installed in a major solar energy system that currently provides about 80% of the District headquarters power needs and helps contain power costs overall. A similar solar project is planned for the Chiquita Water Reclamation Plant in 2016 which will significantly reduce power costs for that facility as well.

District Expenditures

  • 50 percent goes to buying water and paying for power to run pumps, operate and maintain plants and equipment and more
  • 25 percent covers supplies, chemicals, and other necessities
  • 25 percent covers staff costs


Background

In March of 2015 the Santa Margarita Water District Board of Directors took an important step in ensuring the District’s long-term financial health and stability on behalf of its customers by phasing in a water and wastewater rate restructure. The purpose behind the rate restructure is for the District to better align its costs and its revenues in order to protect customers from rate volatility. Knowing that the restructure would be challenging, the Board authorized the use of District rate stabilization reserve funds to ease the transition over the next three years. Additionally, the District has taken steps to hold costs down by installing a major solar energy project to address rising energy costs, deferring non-critical capital expenditures, and managing employee costs. The next round of the restructuring and adjustments takes effect January 1, 2016.

Prior to the rate restructure announced in March of 2015, SMWD was recovering only 40 percent of fixed costs through service charges; the rest was included in the cost of water usage. By fairly allocating the fixed charges across all customers, the District will, over the next four years, cover all of its fixed costs and keep the District financially stable.

Important Customer Communications

  • Proposition 218 Notice – 1/2015
  • Notice of Rate Restructure – 11/2015
  • Rate Open House Invitation – 11/2015
  • Rate Open Houses
    • City of Mission Viejo – 12/8/15
    • City of Rancho Santa Margarita – 1/5/16 & 1/13/16
    • City of San Clemente – 1/21/16

SMWD is currently closed

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