At its April 27, 2021 Board Meeting, the Borrego Water District (BWD) received a presentation from its experts at the nationwide firm of Raftelis Financial Consultants (RFC) on the Rate Study (Study) for water and sewer. RFC began this process approximately one year ago with the development of a sophisticated model to project revenues and expenses over the next five years. All water/sewer revenues, as well as required bond payments/rate coverage ratios requirements, capital projects plus existing new operating expenses were evaluated, studied and new projections developed.

All of this information is input into the Model and estimates are created to determine the rates and charges needed to fund the necessary expenses for the next 5 years. The BWD Board has options that create different impacts upon various segments of the rate base including on the water side fixed, monthly Base Meter Fee (BMF) and water rates. For example, increasing the BMF applies to all customers, where increasing water rates has greater impacts on those customers who use a lot of water compared to one who does not.

Creating an equitable rate structure is the primary reason behind BWD creating a Two Tier system five years ago that includes a seven-unit Tier One. Higher rates are charged for usage over eight units/month, so a rate increase in Tier Two, for example, would have no impact on customers using seven units or less/month.

A summary of the RFC recommendations is as follows:

* Maintain current split of fixed and variable water rate revenue. Currently BWD fixed revenues including monthly base meter fees is 35% of total revenue with the remaining 65% coming from water sales.

* Create a Three-Tier rate structure, currently two, with revised breakpoints for Single-Family Residential customers. Adding another Tier will reflect customer water demand patterns.

* Lastly, Divide current non-residential customer class into two classes: Non-Irrigation (Multiple Units, Commercial, Public Agency) and Landscape Irrigation.

The BWD Board will give the public two weeks to review the information before discussing again at its May 11 Board Meeting. Part of the proposed action on May 11 includes approval of a Public Notice that will be mailed to all Customers announcing a Public Hearing. This notification is part of the State of California’s Proposition 218 Rate setting process.