FPUD tiered rate changes effective Jan. 1

The Fallbrook Public Utility District approved its 2014-15 budget June 23.

The budget, whose primary rate changes are an adjustment in the tiered rate structure and a change in the effective increase date from the beginning of the fiscal year to the beginning of the calendar year, was approved by FPUD’s board on a 3-0 vote with Archie McPhee abstaining and Don McDougal absent. A separate vote June 23 to retain the water availability/standby charge at $10 per acre and $5 for parcels under one acre passed by a 3-1 margin with McPhee in opposition.

“The Tier 1 price went up slightly and the Tier 2 and Tier 3 prices actually dropped a small amount,” said FPUD general manager Brian Brady.

Earlier this year FPUD’s board voted to make water and sewer rate increases effective Jan. 1 instead of July 1 and to modify the tiered rate to change the first tier from 85 percent of the base to 90 percent of the base while retaining the third tier at 110 percent of the base.

Prior to the implementation of the three-tiered system which took effect for 2008-09, Tier 1 water was charged at 85 percent of the base rate and Tier 2 supply was charged at the base rate. In an effort to encourage conservation Tier 3 was implemented which charged 110 percent of the base rate with the possibility of an even higher percentage should mandatory cuts be imposed. The estimate at the time was that the Tier 3 rate would impact 20 percent of non-agricultural water sales. Although state law prevents a water district from providing discounts to certain populations such as senior citizens or low-income residents, an agency can give discount incentives for water conservation and can establish a baseline usage amount.

At FPUD’s May 2013 meeting, a non-voting discussion item indicated a desire for FPUD staff to conduct studies during 2013-14 about a possible modification to the tiered rate structure and to FPUD’s monthly operations charge. The 2012-13 usage data indicated that Tier 3 rates accounted for 10 percent of domestic sales, 19 percent of large lot domestic sales, 0 percent of commercial sales, and 1 percent of multi-family sales while Tier 2 rates were paid for 65 percent of domestic sales, 75 percent of large-lot domestic sales, 57 percent of commercial sales, and 14 percent of multi-family sales and Tier 1 rates applied to 25 percent of domestic, 6 percent of large-lot domestic, 43 percent of commercial, and 85 percent of multi-family purchases.

FPUD’s 2013-14 budget approved in June 2013 assumed that 28 percent of water purchases would be at the Tier 1 rate, 55 percent would be sold at the Tier 2 rate, and 17 percent would be purchased at the Tier 3 rate. The 4,110 acre-feet sold to municipal and industrial customers between July 2013 and December 2013 nearly matched the total amount budgeted, but the 837 acre-feet of Tier 1 supply only accounted for 20.4 percent of the total while Tier 2 usage comprised 56.4 percent of sales and Tier 3 rates were charged for 23.2 percent of sales.

The proposal approved by the FPUD board did not alter FPUD policy that the district recover 75 to 80 percent of fixed costs through a monthly operations charge (the goal of that charge for fixed costs is to avoid penalizing customers for saving water and thus reducing revenue to the district) with water sales accounting for the remaining 20 to 25 percent (the analysis had evaluated changing the operations charge to 85 percent of fixed costs). The approval of the tiered rate change also gave all customers the first five 1,000-gallon billing units Tier 1 rates regardless of usage, which shifted approximately 525 acre-feet annually from Tier 2 to Tier 1.

The adjustment in the Tier 1 percentage changed the Tier 1 rate from $4.03 to $4.19 per unit, lowered the Tier 2 rate from $4.64 to $4.61, and decreased the Tier 3 rate from $5.11 to $5.08. FPUD did not change the Special Agricultural Water Rate of $3.14 per 1,000 gallons or the commercial agriculture rate of $4.06 per billing unit.

The unit cost of recycled water was changed from $3.47 to $3.52 while the cost of potable water used for construction was increased from $5.71 to $5.73 per 1,000 gallons.

The monthly service charge was increased from $36.63 to $38.10 for 3/4-inch meters, from $47.66 to $49.57 for one-inch meters, from $68.02 to $70.74 for 1 1/2-inch meters, from $99.54 to $103.52 for two-inch meters, from $162.38 to $168.88 for three-inch meters, from $258.19 to $268.52 for four-inch meters, from $461.43 to $479.89 for six-inch meters, and from $149.31 to $155.28 for construction meters. The standby service charge for meters of all sizes was increased from $21.83 to $22.70.

Although FPUD had coordinated its water rate changes with fiscal years, the Metropolitan Water District of Southern California and the San Diego County Water Authority both change their wholesale rates Jan. 1. The change in FPUD’s effective date will allow the district rates to be better coordinated with the cost of purchased water.

“This January we will align our water rate increases with our wholesalers,” Brady said.

The water availability/standby charge is used for debt service and capital improvements. FPUD’s capital improvement budget will focus on pipe replacement. “We’ve put an emphasis on increasing the rate of replacement for some of the aged pipes,” said FPUD assistant general manager Jack Bebee. “People will see a little more of that work.”

4 Responses to "FPUD tiered rate changes effective Jan. 1"

  1. Fed up   August 22, 2014 at 3:37 pm

    I am tired of my FPUD Bill going up all the time. I know we are in a drought and water prices will go up. Paying $15 for water and almost $100 for fees is crazy. I guess my money goes to pay the 5 guys standing around smoking cigarettes while the one guy works.

    Reply
  2. AngryMom   August 24, 2014 at 8:59 am

    Here I am trying to conserve water and bring my water bill down and now FPUD is raising prices because I don’t use enough water and have been in Tier 1 for years. Makes NO SENSE! NOT FAIR!

    Reply
  3. Kurt H.   August 25, 2014 at 9:08 am

    Typical.

    How much higher can we go? If anyone has Milt Davies contact information I’d love to have a sit down with him and find out exactly what is going on here.

    Kurt H.

    Reply
  4. fedup2   October 17, 2014 at 1:19 am

    I 100% agree with Fed Up’s comment. My water bill is $14 yet my bill is $130 to $140. So it always makes me angry when I see fpud workers standing around doing Nothing! A couple years ago, they were (working) on my street and would eat there lunch in front of my house. They left a bunch of trash on the ground so I left them a note asking for there mothers # so she could come pick up after them. : ( …..

    Reply

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