With agriculture shrinking, Rainbow Water looks at effect on rates

A presentation at the March 25 Rainbow Municipal Water District board meeting analyzed the financial impact of the elimination of agriculture within the district.

There was no vote or other action taken on the presentation by Larry Carlstrom and Harry Stitle, who represented the district’s Budget Committee. The presentation which addressed Rainbow’s financial feasibility without agriculture was prompted by previous discussions on strategies the district should develop due to its shrinking agriculture customer base.

“I think that it was a well thought out report,” said Rainbow board president George McManigle. “The presentation made sense.”

The presentation indicated that Rainbow would still be able to operate with minor impacts on residential rates. “That, of course, is counting on 2,000 new hookups for developments that are happening east of the 15 in the next two to three years,” McManigle said.

Rainbow currently has approximately 7,200 customers and sells approximately 20,000 acre-feet of water annually. The average residential customer was assumed, for the purpose of rate comparisons, to use 26 units (one unit is 100 cubic feet, or approximately 748 gallons) per bill. The cost of water purchases includes Rainbow, San Diego County Water Authority, and Metropolitan Water District of Southern California charges, and Rainbow’s cost of water share for each billing unit is $0.62. The $175.87 bill for the average customer consists of $46.10 for Rainbow fixed fees, $46.77 for SDCWA and MWD fixed fees, $15.22 of Rainbow cost of water charges, and $65.78 for SDCWA and MWD water costs.

The presentation included seven theoretical levels of usage. Rainbow’s total bill for 3.25 units of usage is $104.99 while the bill for 208 units is $742.87.

Under the scenario that annual water sales fall to 10,000 acre-feet with no new hookups, Rainbow would increase its share to $1.24 per unit, Rainbow’s cost of water would double on the average bill to $30.44, and the total amount would be $191.09. The bill for 3.25 units would increase to $105.79 while the bill for 208 units would be $864.53.

(Since the purpose of the analysis was to determine the impact on residential water rates from the elimination of agricultural sales, the scenarios assume that Rainbow’s fixed costs remain constant and that the CWA and MWD rates and fees do

not change.)

If 2,000 new housing connections use an annual average of 120 units, Rainbow’s share would become $1.18 per unit and the average bill would be $189.50 if the increase in fixed charges is not applied to reduced water rates. Rainbow’s share would be $0.92 per unit and the average customer would pay $183.27 if the additional fixed-charge revenue is used to offset water rates.

The scenario with 2,000 new connections and fixed charges not being applied to water rates translates into bills of $105.65 for 3.25 units and $851.91 for 208 units. If the fixed-charge revenue is used to offset water rates, the customer using 3.25 units would pay $105.10 and the customer using 208 units would be charged $802.03.

17 Responses to "With agriculture shrinking, Rainbow Water looks at effect on rates"

  1. Me   April 17, 2014 at 9:39 pm

    Have no fear…Rainbow and their new fearless leader will raise rates no matter what……

    Reply
  2. Dtoner   April 17, 2014 at 9:52 pm

    "The average residential customer was assumed, for the purpose of rate comparisons, to use 26 units (one unit is 100 cubic feet, or approximately 748 gallons) per bill."

    That is insanity. I’m in RMWD and I’m a residential user. Never in my 8 years of living here have I even approached 26 units. On very bad months, I may come close to half of that (13 units). But I assure you my average is closer to 8 units.

    Yet another example of the flawed management of this water district.

    Reply
  3. Dtoner   April 17, 2014 at 10:01 pm

    ‘I think that it was a well thought out report,’ said Rainbow board president George McManigle. ‘The presentation made sense.’

    How in the world does Mr. McManigle not ask the question, ‘who is using 26 units a month’ and ‘how do we get them to decrease their usage?’

    Reply
  4. Lee   April 18, 2014 at 8:16 am

    WE, THE PEOPLE!

    Reply
  5. oldtimer   April 18, 2014 at 9:41 am

    Any customer not on SDCWA’s discount program for agriculture is considered a residential customer. Rainbow does not provide ANY ag discounts, but County Water does. There are lots of small groves which are considered residential. Many of them use more that 26 units. They pay the same water rate as the ratepayers in the district’s neighborhoods do. Statistically the users of the smallest amounts are not average, nor are the large groves and nurseries who are users of hundreds of units.

    Water rates will go up no matter what Rainbow…or FPUD…do. They buy water from MWD and SDCWA and those agencies’ increases have to be passed on or both Rainbow and FPUD will fold. You can’t sell water for less than it costs to buy and deliver it. Do you think your cable bill or electric bill will go down just because you think they are too high? Will grocery store prices go down?

    Reply
  6. oldtimer   April 18, 2014 at 3:44 pm

    I shouldn’t have muddied the waters by mentioning the large growers in my comparison. I will stick with residential ratepayers.

    In rural RMWD there are many small parcels of 2-5 acres on which the residents grow fruit. They use substantially more water than the 8 units mentioned above; many use much more than 26 units. Most of them do not take SDCWA’s small discount (which is, by the way,on the water only, not on any other costs). The trade off for taking the discount from County Water is that your water supply is interruptible. In times of crisis or emergency, those who are on the discount program do not get emergency water supplies from the storage facilities all the other ratepayers have paid for. Would you be willing to accept that for a few pennies per unit? I wouldn’t.

    Reply
  7. Me   April 18, 2014 at 6:26 pm

    @Dtoner…The most I ever used was 8 units…usually I use 2 units.

    I could shut my water off…and STILL pay over double than nearly every other district in San Diego County.

    And oldtimer, I don’t want to hear anything from you….it’s obvious you have your nose so far up McManigle’s you know what….. that anything you say is worthless.

    Reply
  8. Pink   April 19, 2014 at 10:31 am

    ….now boys, play nice. Things aren’t so rosy over here in FPUD land either, but I think we have it better than you do.

    Reply
  9. RMWD ratepayer   April 19, 2014 at 12:54 pm

    In what ways, Pink? That’s a serious question, not a jab.

    Reply
  10. Me   April 19, 2014 at 1:08 pm

    They need to consolidate MANY of the districts…23 separate districts in one county is ludicrous.

    Oh and hi Pink.

    Reply
  11. Just say NO to internet trolls   April 19, 2014 at 6:53 pm

    "I could shut my water off…and STILL pay over double than nearly every other district in San Diego County."

    Sure if you say so.

    Reply
  12. Lee   April 21, 2014 at 7:17 am

    With this meeting, hasn’t RMWD incriminated itself of price gouging, price fixing and extortion?

    Reply
  13. RtotheM   April 21, 2014 at 7:37 am

    Re: Comment 10 … Consolidating any/many/all the districts in San Diego County only makes sense if there is real benefit. The Rainbow/Fallbrook efforts clearly showed that there would be NO reduction in rates by consolidating. So where is the benefit? Consolidating moves the power base farther away from those who are impacted by bad decisions the most.

    What you are advocating for is simply consolidating water authority in downtown San Diego and leaving Northen San Diego high and dry.

    With local authority we at least have the ability to be heard by the LOCAL Board who are also LOCAL Rate Payers elected by LOCAL voters sharing the same burden that we are all sharing. Water districts are about the truest form of representative government still existing in America today.

    Complaining about it doesn’t help. You need to get involved! Join one of the committees. Attend meetings and speak. Study the budget. GET INVOLVED!

    And try the same thing with SDG&E or AT&T or Time Warner. Let’s see how much attention they give you. Better yet… Try to get the County’s attention. Good luck with that.

    Reply
  14. onthehill   April 22, 2014 at 7:05 pm

    I live on the north side of rainbow hgts rd way up at the top. some of us get our water from a storage tank so not only to we have the high water rate but ALSO a pumping charge to pump the water up to us my friends who live on the south side of rainbow hgts rd less than a quarter mile away dont use the tank water oh and by the way i have 19 psi had to put in a booster system to get water to my house so water rates + pumping charges + water booster elec. = unhappy rmwd customer

    Reply
  15. RtotheM   April 23, 2014 at 10:25 am

    Re #14 – You live on a hill and are unhappy that you have to pay to pump the water to your house??? I’m sure those unfortunate serfs in the lowlands would love to have your view. Who should pay the pumping costs? I doubt that the hill just magically rose up after you purchased your property.

    Please offer a solution that you feel is fair. Complaining is easy. Solutions are hard.

    Reply
  16. RMWD ratepayer   April 23, 2014 at 9:21 pm

    You’re right, #15. It’s amazing what can be done if a problem is stated clearly and possible solutions or at least mitigations are put forth. They sometimes spur others to consider other approaches. That’s a productive way of doing things.

    Reply
  17. Grand.paw   July 6, 2014 at 10:07 am

    Ok I reviewed the budget for coming year.
    salaries for 55 is projected to over $6 million or AVERAGE $135,000 per person, including benefits! Total expense is $50 million which equals $6.48 per unit! That INCLUDES $1.3 in the budget for sewer costs. So 26 units should COST $168 if every 100 cu ft unit was billed at the same rate. I use 16 units and pay $211 instead of $103 at that rate, so whose got the math wrong?

    Reply

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