Nancy Weber: Balancing NID Rates and Needs

NEVADA CITY, Calif. March 25, 2019 – It took the threat of a pending 50% rate increase for NID’s treated water customers to bring us out at dinnertime for an NID informational meeting on Tuesday evening (3/19). The following are treated water base rate increases for the next 5 years: 2019-45%, 2020-15%, 2021-5%, 2022-4%; 2023-2.50%: add 5.72% for flow (usage) rates. You will have a hard time determining your usage costs because the NID mailed descriptive brochure failed to define amounts for the various usage tiers. Raw water customers will see 5.72% raise in both flow and base rates

Word is out in our neighborhoods and there is great concern for the proposed rate structure as well as the process being used to give an explanation for the need—lots of numbers on many pages and explanations that leave people doubting.

To oppose the increases, protest letters from NID treated and raw water customers will be accepted at NID offices “until the close of the public hearing” on April 24th and will be tallied for use by the NID Board in making a final decision on the increases. A count of fifty percent of all customers plus one individual customer is needed to defeat the proposal.

While NID has the good fortune to sit at the developed headwaters of the South Yuba and Bear Rivers and has extensive water rights, an advantage that few water districts have, it has an expansive system of dams, hydroelectric generating facilities, treatment plants for potable water and over 400 miles of canals. It is an expensive system to maintain.

In the past five year cycle of rate increases (2013-2018–6%/year for five years, cumulative) NID has extended miles of waterlines, replaced major water conveyances and hydroelectric equipment, implemented a watershed management program, a research based program to find methods to limit the use of RoundUp while actively participating in State politics in support of NID’s water rights. For the most part, budget monies have gone to needed projects.

NID is a valued contributor to both the economy and quality of life for residents of western Nevada and Placer Counties. Our communities need NID to be a strong organization. Our rate and taxpayers need to be able to afford water.

The NID Board with 3 newly elected Board members passed a $92 million budget in mid-December 2018 (by a 3-2 vote) without establishing a rate structure that would help support that budget.

What can NID do now?

1. Cut the 2019 budget (hydroelectric, recreation and water funds) by 10% or more.

2. Freeze hiring

(Previous history 1&2—NID website/ archived Board minutes2/11/09)

3. Sell excess NID properties retaining those along watersheds or that are needed for specific purposes. Use profits to fund budget.

4. Set water rate structure in the 6-8%/year range for 5 years, following State conservation guidelines. Divide large increases over several years.

Revisit 2018 allocation of costs between treated and raw water–75% to treated water and 25% to raw. (An extensive 2008 NID cost of service study attributed 63.5% of costs to treated and 36.5% to raw water). Fairness in allocated costs is a recommendation of Proposition 218.

Revisit drought rate pricing with the understanding that irrigated fields recharge ground water and provide fuel breaks to slow the spread of wildfire.

5. Set up before the rate increase is implemented, a reduced water cost program for low income people.

6, Use hydroelectric funds, property taxes, interest earnings to balance reduced budget.

7. With expert outside help, review and revise NID’s organizational design and delivery systems to help NID become a more cost effective organization.

8. Hold Strategic Planning Meetings—NID Board and Staff; establish mutual goals and work together to implement changes.

9. Rethink storage possibilities and develop a time-lined plan: dredge reservoirs, negotiate storage in Spaulding. Support landowners’ participation in an National Resource Conservation Service-funded program to help develop storage on private lands—ponds, tanks.

In the next year:

1. Sell water out of District, preferably to northern California destinations protecting water rights by avoiding long term deliveries where the water will be for used for residential needs.

2. Reestablish the Rate Stabilization Fund to buffer the need for large rate increases when unexpected costly events take place (major infrastructure failure not covered by insurance).

3. Part of the cost of NID’s storage is providing a pressurized water supply for fighting fires; it is included in treated water rates. Could this storage be separated out of the cost of service and be specifically paid for by sources other than treated water rates?

Water issues are all complicated. A focus on balancing local needs and State requirements is tricky but can be dealt with by a capable NID Board, staff and informed constituency.

Nancy Weber is a 29 year resident of Nevada County, an NID treated water customer who lives in Nevada City. She is a recently retired NID Director for Division I, having served on the last three NID Proposition 218 Rates Committees.