If approved by the district’s board of directors, the three-tiered rate increase would take effect Feb. 15 and Dec. 15, 2010, and Dec. 15, 2011.
Charlie McNiesh, the district’s general manager, said this increase is a “modest increase at the rate of inflation” and added that raising rates now would avoid the district having to make a larger increase in the future.
The increased fee revenue would help the district maintain Scotts Valley’s pipes, tanks, water treatment plant and wells, as well as continue the services it offers.
“We do have a few years of pretty stable income and expenses,” McNiesh said. “There are no foreseeable major outlays that would cause a reversal (in that trend).”
McNiesh said the only major project the district might undertake using cash from water rates and district reserves is to build a replacement well to tap a deeper part of the aquifer from which Scotts Valley draws its water.
Other large-scale capital projects, including a much-discussed recycled water pipeline between Scotts Valley and Pasatiempo Golf Club, would be paid for through other sources, McNiesh said.
The district most recently raised rates in 2007 and 2008 — a 9 percent increase in Feb. 2007, and 6 percent increases in both December 2007 and December 2008.
That increase helped the district build its reserves, according to water district management. Today, the district is in a more stable financial position.
If approved, the forthcoming increase would be roughly 2 percent for most households in 2010 and 2011 and less than 7.5 percent both years for customers who use more than 50,000 gallons every two months.
The average household in Scotts Valley uses a little more than 16,000 gallons during each two-month billing cycle.
If the board approved the rates Thursday, Nov. 12, the district is scheduled next week to mail a letter with the proposal to customers. Under the preliminary schedule, customers have until Feb. 11 to file a protest of the rate increase with the district. By law, if more than half of the district’s customers protest the increase, it will not be implemented.
Valid protests must be in writing, be signed by the property owner, include the proper assessor’s parcel number, and be delivered to the district.
The public hearing during which the board will vote on the rate increase is scheduled for
7 p.m. Feb. 11 at district headquarters, Two Civic Center Drive, in Scotts Valley.