For quite a few years, SLVWD has been treading water financially, posting an operating loss every year since 2007. A three-year drought forced water-conservation measures that saw water consumption and revenues drop by over 25%—even while the number of customers increased. Even with a drought "surcharge" to make up for revenue losses, reserves dropped dangerously.
Recognizing the emergency, the Board worked with the Budget and Finance Committee to develop a long-term solution. In February 2016 the District commissioned a cost-of-service study, followed by a comprehensive rate study a year later to develop a financial plan that would address not only day-to-day operations, but needed capital improvements we'd already identified in our Capital Improvement Plan. The result was the rate restructuring passed in the fall of 2017.
The new rate structure eliminates tiers in accordance with recent legal changes. So every customer pays the same amount for each unit of water used. It also reduces the basic service charge. Since more of each bill is based on water usage, it allows customers to have more control over their rates and encourages conservation.
The higher first-year increase has allowed SLVWD to secure financing for capital-improvement projects we were unable to afford with the older rate structure. The rate increase will pay for infrastructure projects for several years and then begin to build up district financial reserves. This protects the district from high interest rates when financing projects and is a prudent measure against emergencies in the future.
In addition, SLVWD has received recent recognition for our financial work:
The cost-of-service and rate studies are available on the SLVWD website.