Water Rate Study

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CITY APPROVES WATER RATE INCREASES

At the City Council meeting of January 12th, a series of water service rate increases designed to generate a 5.5% annual increase in revenues, along with a low income discount, were approved by Council and will be implemented over the next five years. The rate increases include a water conservation surcharge of $0.49 per unit that will be in effect for the first year of the increases only.

The rates and discount became effective with the first billing on or after February 1, 2016. 

Reasons for the Increases

The rates were recommended as part of a water rate study completed by the independent consulting firm of Bartle Wells Associates and were deemed necessary to address a number of issues impacting the Water fund, including the need to:

  • convert the current multiple consumption rate structure into a single consumption rate to comply with state laws and regulations;
  • adjust the fixed (service) and variable (consumption) rate structure to more accurately recover actual costs incurred and mitigate the impact of fluctuations in future water consumption;
  • recover lost revenue as a result of state mandated water conservation; and
  • recover the costs of complying with the state's recently mandated chromium 6 requirements.

To see a copy of the rate study, please click the link below.

2015 Water Rate Study 

Questions about the rates and discount 

Notices of the proposed rates and discount were mailed out to all listed property owners and a series of public meetings were held prior to the Council meeting of January 12th in order to provide the public as much information as possible and answer any questions about the proposed rates, in accordance with Proposition 218. A copy of the notice can be viewed by clicking the link below.

Prop 218 Public Notification 2015 

A total of seven community meetings were held, and a video of the meeting/presentation is available for viewing at: http://vacaville.granicus.com/MediaPlayer.php?view_id=6&clip_id=1375.

During the public review period the City received several inquiries or concerns regarding the proposed water rate increases and discount. Although much was covered in the public notice that went out, we attempted to provide answers to several frequently asked questions as noted below: 

FAQ

How much of the rate increase went towards an increase in employee salaries?

None. There were no Utility Department employee salary increases included in the proposed rate increases. 

Are tiered rates now illegal?

Tiered rates by themselves are not illegal. The recent court decision in San Juan Capistrano Taxpayers Association v. City of San Juan Capistrano affirmed the provision in Proposition 218 that prohibits water agencies from charging a water customer more than the cost of providing water to that customer. This thereby prohibits tiered rates unless the water agency can prove that the costs of providing water to one class of customer differs from that of another customer. It further prevents one class of customer from subsidizing another class of customer if the cost of providing water to each is the same.

In the case of  Vacaville, it doesn't cost us any more or less to deliver water to our parks, schools, public buildings, businesses, residents, or seniors. Accordingly, our tiered rates were determined to be out of compliance with both the legislation and case law.

Why did the City eliminate the existing Senior Discount rate?

As a result of the legislation and case law cited above, the City can no longer offer a rate to seniors aged 65 or older that differs from the cost of the service or would be subsidized by other rate payers. Nevertheless, it was important to the City to provide some level of rate assistance to our seniors, as well as those members of the community on a fixed income or otherwise in financial need. Therefore, the City was able to identify up to $400,000 in non-rate revenues that would allow up to 8,333 residents annually to receive the discount based on their income.   

How much will my exact bill increase?

Because the City previously had several tiered and special rates, the impact will be different for different classes of customers. However, the rate for everyone will be the same going forward, and by the final year of the increase in 2020, the cost of water is projected to be $0.003 per gallon, which is still significantly less than alternative sources of water, and will continue to be amongst the most inexpensive water in the region.

For any inquiries regarding the approved rates you may call (707) 469-6400 or you can email us at utilitiesdept@cityofvacaville.com. You can also call (707) 449-5128 to get help in calculating or understanding your bill.