Clarifying how SFID’s 9% revenue adjustment translates into varying percentage rate increases
Regarding the June 22 article, “Water Board approves budget containing rate increase,” I wish to explain the inaccuracies behind the following statement: “…and two 9 percent rate increases already instituted in January and last June.”
Santa Fe Irrigation District’s (SFID) approved 2016 Cost of Service Study (COSS) set forth a three-year revenue adjustment of 9%, 9%, 9%.
Last June’s 9% revenue adjustment resulted in a wide percentage of rate increases.
Single family residential customers, depending on the size of their meter and the amount of water consumed, had water bills that ranged from decreases of – 4.5% to increases of 24.3%, a 28.8% swing. In general, the larger the meter and the higher the water consumption, the higher the percentage rate increase. However, the June 2016 rate increase also resulted in customers with the smallest meter, and the smallest water consumption, having their water bills increase 20%.
The 2017 9% revenue adjustment did not result in the wide range of rate increase percentages experienced June 2016 to December 2016. This current year’s rate increase percentages generally range from 8% to 12.5%; higher rate increase percentages fell to customers who used more water, regardless of the size of their meter.
At present, I am unable to determine the actual customer bill impacts of the COSS proposed 2018 9% revenue adjustment, as district staff has yet to run the recently adopted wholesale pass-through increases through the COSS rate model.
Why is this distinction between a 9% revenue adjustment and variable rate increase percentages important?
Well…if you’re the owner of a large parcel and have 2017 water bills that are based on a two-year accumulated rate increase in the neighborhood of 30% – 35%, reading that “…two 9 percent rate increases already instituted in January and last June” probably smarts. If you’re the owner of a small parcel and use very little water, knowing that your 2017 water bill is based on a two-year rate increase of around 28% probably likewise smarts. In fact, having run the numbers on 15 different single family residence customer classes, not a one of those 15 examples actually resulted in a 9% increase!
The SFID Board of Directors has been discussing rate impacts for several board meetings and two special meeting workshops. The June board meeting agenda included a comprehensive schedule for a new COSS to be undertaken throughout 2018, to be adopted by November 2018, to potentially take effect January 2019.
Marlene E. King
SFID Board Member, Div. 3, Fairbanks Ranch and large portion of the Covenant