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Proposition 218 Overview

What is Proposition 218?

In 1996, California voters adopted Proposition 218 (Prop 218), which added Article XIII D to the state Constitution. Local government agencies such as the Union Public Utility District must comply with Prop 218 when proposing new or increased water charges. The agency must mail a notice of the proposed charges to its customers, including the amount or basis for calculating the water charges. No sooner than 45 days after mailing the notice, the agency must hold a hearing at one of its public meetings and consider any comments made by members of the community. The agency also must consider the number of protests submitted by property owners and water account holders. If valid protests are submitted for a majority (50% + 1) of properties served by the District, then the District cannot adopt the proposed water charges.

 

Understanding a Rate Study: Purpose and Importance 

The rate study provides an in-depth analysis of the District's expenses related to operating and maintaining its water and systems, as well as delivering these essential services. It examines several important factors, including the financial plan and revenue needs, funding for capital projects to repair aging infrastructure, achieving recommended reserve levels for operations and capital replacement, and accounting for inflationary cost increases.

Rate Study Process and Benefits: How It Was Conducted and Who Was Involved 

In February 2024, the District hired the experienced utility rate consulting firm NBS to work with District staff on assessing its utility rates. NBS provides services to a range of government entities, including special-purpose districts, cities, counties, and state agencies. Their expertise covers public engagement, special financing districts, fee studies, cost allocation plans, and utility rate analysis. During this process, the General Manager and the District Board reviewed the preliminary study results and provided their recommendations.

Domestic Proposed Water Rates 

To meet the projected revenue goals outlined in the Report, the District proposes a series of rate adjustments over the next five years. The first adjustment will take effect on January 1, 2025, raising the overall water rate revenue by 10 percent for domestic water users. This initial rate change will also include updates to how costs are allocated among different rate structure components. Subsequent adjustments will be implemented each January 1, concluding on January 1, 2029, as detailed in Table 1. These adjustments are necessary to ensure the District can fulfill its financial and service obligations related to the rehabilitation of the water system.

The updated water rate cost-of-service analysis ensures that each ratepayer contributes a fair share of the service costs. The proposed rates will follow a similar structure to the current system, which includes a fixed monthly service charge based on the size of the water meter and a uniform rate for water usage measured in hundreds of cubic feet (HCF). 

The proposed water rates comply with legal requirements for cost of service and proportionality. Detailed information about the District’s current and projected revenue needs, along with the methodology for updating the rates, is available in the Report, accessible at www.upudwater.org or by contacting the District office for a copy. Complete rate schedules for the next five years are presented in Table 1 (on the following page). The specific changes to individual bills will depend on meter size and water usage patterns.

Proposed vs Current Domestic Water Rates

The water rate structure is based on a cost-of-service analysis that includes fixed costs to cover non-consumption related expenses such as customer service and billing, operation and maintenance of the water system, and public fire protection that benefit all our customers. This fixed cost, also called a base rate, is the same every month, regardless of consumption. The base rate a customer pays is determined by the size of the water meter. Variable costs, which are a function of the quantity of water consumed, are included in the consumption rate.

A table displaying proposed changes in domestic water rates, fixed monthly charges, water usage charges, and fees from the current to 2029.
Domestic Emergency Response Charges

The District is obligated to meet its annual net revenue requirements regardless of whether consumption levels decline due to State mandated conservation or other unexpected events (e.g., natural disasters, wildfire, catastrophic infrastructure failure, etc.). To this end, emergency responses rates are intended to maintain the necessary level of revenues. The table below shows the proposed maximum emergency response charge ($/HCF) that could be enacted by the District Board of Directors in the event of an emergency scenario by mandate shortage level and calendar year for domestic water customers. Details regarding the calculation of the emergency response rates can be found in the rate study.

A table of increasing Domestic Emergency Response Charges by conservation goals from 2025 to 2029.
Raw Water Proposed Rates 
Proposed vs Current Raw Water Rates

 The water rate structure is based on a cost-of-service analysis that includes fixed costs to cover non-consumption related expenses such as customer service and billing, operation and maintenance of the water system, and community fire protection. This fixed cost, also called a base rate, is the same every month, regardless of consumption. The base rate a customer pays is determined by the size of the water meter. Variable costs, which are a function of the quantity of water consumed, are included in the consumption rate.

A table showing proposed changes in raw water rates, monthly charges, and fees over several years.
Raw Water Emergency Response Charges

The District is obligated to meet its annual net revenue requirements regardless of whether consumption levels decline due to State mandated conservation or other unexpected events (e.g., natural disasters, wildfire, catastrophic infrastructure failure, etc.). To this end, emergency responses rates are intended to maintain the necessary level of revenues. The table below shows the proposed maximum emergency response charge ($/HCF) that could be enacted by the District Board of Directors in the event of an emergency scenario by mandate shortage level and calendar year for raw water customers. Details regarding the calculation of the emergency response rates can be found in the rate study.

A table showing increasing Raw Water Emergency Response Charges from 2025 to 2029 based on different conservation goals.
UWPA Fee 

Utica Water & Power Authority (UWPA) was created in 1996 as a Joint Powers Authority to hold our water rights and deliver surface water from the North Fork Stanislaus River to UPUD and the City of Angels (COA). The UWPA is asking both the UPUD and the City of Angels to increase their contributions by 10% each year for the next five fiscal years to cover annual costs. Currently, our District collects $370,000 annually from customers. This rate study proposes a monthly UWPA fee for Accessory Dwelling Units (ADUs) in addition to all other customers to help offset per-customer costs as the fee increases over the next five years.

Changes to Fixed Charges

The District is proposing to adjust the fixed charges for both Domestic and Raw water rate structures to better align with current costs of service and to take into account maximum flow for each meter size.

How to Participate in the Proposition 218 Process 
As a property owner or water service customer, you have the right to participate in the Proposition 218 process. There are several ways you can get involved:
Review the Full Rate Study

You can access the comprehensive rate study below  or request a copy by contacting the district office.

UPUD 2024 Water Rate Study
Attend the Public Hearing

The Public Hearing is scheduled for Wednesday, December 11, 2024, starting at 6:00 PM, or as soon thereafter as possible, at the Union Public Utility District Corp Yard at 988 Sheep Ranch Road in Murphys. For further information, please contact the District's Office at (209) 728-3651.

Workshops 

UPUD is holding two workshops to discuss the upcoming rate adjustments and answer any questions from ratepayers. Both meetings will take place on Thursday, November 14th at the UPUD Corp Yard at 988 Sheep Ranch Road in Murphys. The first session, for raw water ratepayers, will be from 1:00 PM to 2:30PM. The second workshop, for domestic ratepayers, will be held from 6:00 PM to 7:30 PM.

Do I Need to Submit a Separate Protest for Each Parcel if I Own Multiple Properties? 

Yes. Because the protest threshold is based upon a majority of the total number of parcels, it is important that a separate protest be submitted for each parcel.

Postal Mail
Union Public Utility District
339 Main Street
Murphys, CA 95247
 

Protest Procedure 
NOTE: If the District receives a majority protest, the current rate schedule will remain in effect. The current rates, established in 2022, include three more years of scheduled 10% annual increases.

As the owner or ratepayer of a parcel subject to the proposed rate adjustments, you may submit a written protest against these changes. If a majority of affected owners or customers of record submit written protests prior to the end of the hearing, the Board will not approve the proposed rates. Only one written protest per identified parcel will be counted.

You have the right to withdraw a previously submitted protest before the conclusion of the Public Hearing. The District will count all complete written protests received by the District's Main Office by 4:00 p.m. on December 11, 2024, or submitted in person at the Public Hearing before it concludes. Protests submitted after the hearing will not be counted. Written protests will not be accepted by email or fax, and verbal protests will not be counted.

A written protest must include the following information: (1) Your full name (2) The parcel's address or assessor’s parcel number, (3) Whether you are the owner or the person receiving the service subject to the fee, (4) A statement opposing the proposed rate adjustments, (5) Your original signature. Protests may be submitted by mail or in person to:

Union Public Utility District Attn: Raw Water Rate Protest 339 Main Street Murphys, CA 95247 At the Public Hearing, the Board of Directors will review all written protests and listen to oral comments about the proposed rate adjustments. However, oral comments alone will not count as formal protests unless they are submitted with a written protest.

At the end of the hearing, the Board will decide whether to adopt the resolution authorizing the rate adjustments for water service as outlined.

Below is a list of the District's historic and current rate studies: 

2023 Water Rate Increase

On December 7, 2022, at 5:30 p.m., the Union Public Utilities District Board of Directors held a public hearing at Murphys Mason Hall, located at 384 Church Street, Murphys, CA 95247, to discuss the proposed water rate increases outlined in this notice. Following the hearing, the Board approved a District-wide water rate increase. The rate schedule adopted in 2023 remains in effect. 

A Message from the General Manager 
Three children examining water outdoors with cups, alongside text from a utility district's general manager about water conservation.
An infographic on benefits of Proposition 218 for water sustainability, infrastructure, and legal rights defense.