GCSD’s water rates have not been significantly increased since Fiscal Year (FY) 2007/08 (which ended 6/30/08). There was an increase of less than 1% in FY 2010/11, and a “drought increase” in the volume usage rate in FY 2013/14— which partly made up for the loss of revenue due to reduced usage during the drought— but these increases were insufficient to keep up with increased costs of power, raw water, and regulatory requirements. The District has coped with this shortfall by streamlining its management and administrative expenses (total personnel expense in the Water Fund was cut from $1,028,666 in FY 2008/09 to $818,875 in FY 2014/15, a reduction of 22.7%), but the District is still operating in deficit.
There is also a long-term problem. The rate study that was the basis of the FY 2007/08 rates did not address the need to repair and replace the aging water system infrastructure. To ensure that the District will have a functioning water system into the future, it must build a reserve fund to pay for major renovation that will have to be done, some within the next few years. While the District hopes to obtain some grants to support this work, the District will have to provide partial matching funds to win such grants.
To address these issues, the District commissioned a rate analysis, conducted by an independent agency, to determine the Water Fund’s revenue requirement for sustainable future operation, and to translate that into a rate structure that fairly reflects actual cost of service.
The new rate increase will go into effect beginning with the April 1, 2016 billing.Public Statement re Water Rate Adoption 2016.pdf