SSWD Passes Water Rates Adjustments for Future Reliability

On Monday, October 14, 2024, the Board of Directors passed Resolution No. 24-10, approving amendments to the District's Regulation No. 3, to show the proposed adjustments in water service rates and charges for 2025 through 2029. This series of rate adjustments is based on findings from the 2024 Comprehensive Water Rate Study (conducted by an independent firm) reviewed SSWD’s finances including current revenues, costs, and future investments in infrastructure.

The study indicates that SSWD’s current income and expenses are currently well-balanced and managed, however, the study recommended that SSWD apply annual rate increases over the next five years to address inflation, rising construction and operational costs, and expanded investments in capital infrastructure.

The approved rate increases are:

• 5% in 2025 and 2026
• 4% annually from 2027 to 2029

Learn More:

• Proposition 218 Notification: Proposed Rate Increase for Water Service
• Final 2024 Rate Study Report
• 2024 Rate Study Findings Presentation

FREQUENTLY ASKED QUESTIONS

About the 2024 Comprehensive Water Rate Study

What is a rate study?

A rate study is a comprehensive analysis conducted periodically to review SSWD’s financial health, determine the total costs of operating the District’s water system (the revenue requirement), and determine the rates necessary to cover the costs of providing safe, reliable water services to our customers.

Why was the 2024 Comprehensive Water Rate Study conducted?

The 2024 Comprehensive Water Rate Study (Rate Study) was conducted to assess SSWD’s current financial situation, including revenues and expenses. It aimed to ensure that our rates accurately reflect the cost of delivering high-quality water service, including funding for future infrastructure needs and to maintain prudent levels of financial reserves.

Who conducted the Rate Study?

The Rate Study was conducted by an independent consulting firm, Hildebrand Consulting. They specialize in utility financial analysis and rate studies for utilities like SSWD.

Rate Study Findings

What were the findings of the Rate Study?

The Rate Study found that SSWD’s current income and expenses are currently balanced, but that not increasing water rates to adjust for inflation, rising construction and operational costs, and to fund necessary infrastructure improvements would result in the District’s revenues to fall below expenses in the next few years. 

What are the rate increase recommendations from the Rate Study?

Based on the findings, the Rate Study recommends the following annual rate increases were approved by the Board and are intended to ensure continued financial stability and to support ongoing investments in our water system:

• 5 percent each year in 2025 and 2026
• 4 percent each year in 2027, 2028 and 2029

What are the other recommendations from the Rate Study?

Additional recommendations from the Rate Study include:

• Rate Structure Update: Updating the rate structure for fair cost distribution among single-family, multifamily, and commercial accounts, ensuring compliance with Proposition 218. This involves applying a uniform rate to non-residential and large multifamily customers and revising tiered water rates to ensure that each customer class pays their fair share of the costs of receiving District water service.
• Water Shortage Surcharge Policy: Water Shortage Surcharge Policy as been approved to manage financial impacts during droughts and other water shortage events, subject to approval by the SSWD Board of Directors. This policy aligns with SSWD’s Water Shortage Contingency Plan and applies a percentage surcharge to Usage Rates only to ensure financial stability during times of shortage. This surcharge is discretionary with the Board and would be imposed only in sustained, severe shortages that could impact the District’s continued ability to provide water service.
• Monthly Private Fire Service Charge Update: The Monthly Private Fire Service Charge covers costs related to dedicated fire protection lines used for internal sprinkler systems and fire suppression on private property. SSWD does not meter or charge for water used for fire suppression.

How will the rate adjustments affect my water bill?

The rate adjustments are designed to cover increased costs and fund infrastructure improvements. The exact impact on individual bills will vary depending on water usage and service type.  If you are interested in understanding the impact of the proposed rate increases on your water bill, please contact SSWD’s Customer Service at (916) 972-7171 or feedback@sswd.org.

How have inflation and increasing construction costs impacted the rate increase recommendation?

Inflation and rising construction costs directly impact SSWD’s operational expenses, and the costs associated with maintaining and upgrading our water infrastructure. For example, over the past five years, the cost of drilling wells has surged by 203%, while fire hydrant assembly costs have increased by 146%. These increases highlight the financial pressures SSWD faces in delivering reliable water services.

How do SSWD’s rates compare to other neighboring water providers?

SSWD's rates are positioned competitively among neighboring water providers, reflecting sound investment and effective management of our water system. Our current and proposed rates are set to ensure reliable water service, while also accommodating necessary infrastructure upgrades and operational costs. This balanced approach supports our commitment to maintaining high-quality service standards while remaining responsive to community needs and financial sustainability.