Updating the water utility’s long-term financial plan and performing a comprehensive cost-of-service analysis is a prudent business practice to ensure the utility can fully fund its revenue needs from Calendar Year (CY) 2025 through CY 2029 (Rate Setting Period) and beyond. In reviewing and updating water rates, the first step is to thoroughly check the financial health of the water utility based on existing rates. Revenues from existing rates generate positive net operating income through CY 2029, which is used for capital spending and reserve funding. However, by CY 2029, net income is minimal and wouldn’t be sufficient to fund the District’s capital needs while maintaining healthy reserves. The utility’s Capital Improvement Plan (CIP) over the Rate Setting Period equals $15.5M, including a treatment plant, pipeline replacements, and meter replacements. The proposed financial plan is projected to generate an additional $2.5M by CY 2029 through a phased-in approach.
Click here to read the view the rest of the 2025 Cost-of-Service Rate Study.