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2021 Water Rate Study

Proposition 218 Notice
The Scotts Valley Water District Board of Directors will hold a Public Hearing on Thursday, October 14th.  The Board of Directors will consider adoption of proposed changes to water rate and the water rate structure.  Read the full Proposition 218 Notice

The Scotts Valley Water District is working on a new Water and Recycled Water Rate Study that could affect the cost of water service through proposed changes to rate tier structure and water rates for different customer categories. 

Rate Development Process (key dates)
November 4, 2020       Project Kickoff
Spring 2021                 Financial Plan development
June 10, 2021             Water Rate Workshop Presentation 
July 8, 2021                 Rate Study Update
August 12, 2021          Board Review of Rate Study /Proposed Rate Increases
                                   Rate Study Report  Presentation Slides Presentation Video Recording
October 14, 2021        Public Hearing
January 1, 2022          New Rates to Become Effective

The mission of the Scotts Valley Water District is to deliver a sustainable, high quality water supply in an environmentally responsible and sound  financial manner while providing outstanding customer service.

The Scotts Valley Water District is proposing a rate increase and changes to the rate structure. The District last reviewed and adjusted water rates in 2016. The new study looks at a five-year period ending in 2026 and focuses on the cost of service and fair and equitable rate development. The rate increase is being considered so that the District can pay for ongoing operations and replace aging infrastructure. The District has fixed costs that need to be met regardless of customer water demand, including maintenance and upgrades, customer service, and staffing. Planned infrastructure upgrades include replacement of Well 3B and improvements to District water mains and storage tanks. 

Recent rate-funded projects include: 

The Scotts Valley Water District Board of Directors will hold a Public Hearing on Thursday, Oct. 14, 2021, during the regular Board meeting. The Board of Directors will consider adoption of the proposed water rates and changes to the water rate structure affecting all water customers. Interested persons are encouraged to attend and comment on the issues being discussed. The meeting will be held in a hybrid format, online and in the Santa Margarita Community Room located downstairs at 2 Civic Center Drive, Scotts Valley, CA.

If adopted, the proposed new rates would take effect Jan. 1, 2022, with annual increases each January 1, up to and including Jan. 1, 2026.

Any property owner or tenant who is a customer of the Scotts Valley Water District may protest the proposed water rate increases and changes to the water rate structure. If you oppose the proposed water rate increases and changes to the water rate structure, Proposition 218 requires that your protest must be submitted in writing to be counted, even if you plan to attend the Public Hearing. To be counted, the protest must:

  • Be in writing
  • State opposition to the proposed rate increase
  • Identify the parcel by assessor’s parcel number or street address
  • Include the original signature of the owner of record or a tenant who is a customer of the Scotts Valley Water District
  • Be received before the conclusion of the Public Hearing on Oct. 14, 2021

One written protest per parcel, filed by an owner or a tenant who is a customer, will be counted. Only written and signed protests that include the writer’s address and/or assessor’s parcel number will be counted to determine whether a majority protest to the proposed water rate increase exists. Written protests may be mailed, e-mailed or hand delivered to the General Manager, Scotts Valley Water District, 2 Civic Center Drive, Scotts Valley, CA 95066, or contact@svwd.org.

What is the anticipated impact to a single-family household?
A median single-family household is paying $76 a month for water service, based on an average of 4,000 gallons used in a month. Under the proposed rates, the median household’s monthly bill is expected to be $82, an increase of $6.

Why did the District conduct a rate study?
Pursuant to California Government Code, public water agencies must demonstrate a nexus between the cost of providing services and benefits received. Rates have to reflect the costs of providing water at each tier. No group of customers can be required to subsidize another’s lower rates. At the direction of the Board, the rate study process began in October 2020. The goals of the study include determining the District’s revenue requirements, conducting a cost of service analysis and creating rate models that show a clear nexus between the District’s costs and customer rates.

Does the drought have to do with the proposed rate increase?
No, the scope of this rate study did not include evaluating drought impacts to the District’s revenue.

Does the proposed increase go towards salaries and benefits?
A nominal portion of revenue received from the increase will help the District to maintain its efforts to recruit and retain a skilled workforce that receives compensation on par with similarly sized water utilities in the region.

What annual water rate increases can customers expect in the future?
The Board is committed to evaluating water rates annually and setting rates based only on District needs. The table sets the maximum allowable rate. In the past the Board has implemented lower rates than previously adopted.

When would new water rates go into effect?
The new rates would be implemented Jan. 1, 2022.

Are there changes to the water rate structure?
Yes, there are five changes:

  1. Adjust Potable Water Rates Schedule to Reflect Monthly Billing Basis: The District plans to transition its potable water customers from billing on a bi-monthly basis to a monthly basis beginning in January 2022. All proposed rates, charges, and residential tier allotments shown are on a monthly basis. Current recycled water rates are already on a monthly basis.
  2. Implement Volumetric Rates per 100 gallons: All current Volumetric Rates are per 1,000 gallons (kGal) but will change to Volumetric Rates per 100 gallons (cGal). This proposed change is intended to improve customer understanding, as 100-gallon units are easier for customers to visualize and comprehend.
  3. Implement Same Basic Meter Charges for Potable and Recycled Customers: Potable and recycled water customers are currently subject to different Basic Meter Charges. Using the same Basic Meter Charges for all customers will simplify the District’s rate structure, and reflects the fact that the services recovered by Basic Meter Charges do not vary significantly between potable and recycled water customers.
  4. Eliminate the “Other” Potable Water Volumetric Rate: Little to no potable water use has been charged at the Volumetric Rate for “Other” over the past few years so it will be eliminated from the proposed rate schedule to simplify the rate structure.
  5. Update Residential Tier Allotments: The tier allotment calculations used in the prior rate study will be refined to reflect updated data. The proposed refinements result in a reduction to the Tier 3 allotment. All proposed residential tier allotments are shown on a monthly basis due to the planned transition to monthly billing for potable water customers.


Expense Chart Last 4 Years

Revenue Chart Last 4 Years