Proposition 218 Notification

Notice of Public Hearing Date and Water Rate Adjustments

In accordance with California Constitution Article XIII D, the Centerville Community Services District (the “District”) recommends adopting proposed fees and charges.  You are receiving this notice in compliance with California Proposition 218 requirements that all impacted property owners are mailed a notice of proposed rate changes at least 45 days prior to the public hearing.   It describes the District’s proposed rate increases, as well as proposed new fees, and explains why they are necessary.  This notice also provides information on how to file a protest against the proposed rate increases and new fees if so desired.  Please call the office at (530) 246-0680 should you have any questions.

At the June 8, 2022 Special Board meeting, the Directors reviewed and adopted a preliminary Operations & Maintenance (“O&M”) Budget based upon the related cost-of-service analysis study.

The Board of Directors set a public hearing for July 27, 2022, at 7:00 pm (“Special Board Meeting”).  The  Special Board Meeting will be held at the District Office located at 8930 Placer Road, Redding, CA, and will also be available via Zoom.  Additional information related to attendance and participation will be included in the Special Board Meeting agenda notice.  Please refer to the posted agenda for the most current meeting information.  At the public hearing, the proposed rate increases and proposed new fees will be presented and the public will be given an opportunity to comment.  If adopted, the proposed changes will become effective August 1, 2022.  

The following is a summary of the recommended adjustments:

• A rate adjustment is proposed to the current Base and Consumption Rates - affecting all customers.
• A rate adjustment is proposed to the Rate Stabilization Fee (RSF) - affecting all customers.
• A temporary Drought Surcharge is proposed to recover the supplemental water purchase expense - affecting all customers.
• A rate adjustment is proposed to the Water Availability Charge (WAC) - affecting 19 customers.
• Adjustments are necessary to the Base Rate Surcharge and the Consumption Rate Surcharge for Pump Zone A1 - affecting approximately 28 customers.
• A rate adjustment is proposed to the Backflow Prevention Rate - affecting approximately 61 customers.

Basis of Proposed Rates                                        

 In providing adequate water service and supply to its customers, the District must receive sufficient total revenue to ensure proper operation and maintenance (“O&M”), development and sustainability of the water system, and the preservation of the District’s financial integrity.  The District utilizes a cash-needs approach for the basis of rate-making.  The basic revenue requirement components of the cash-needs approach include: O&M expense, taxes or transfer payments, debt-service payments, contributions to specific reserves, and the cost of capital expenditures that are not debt financed or contributed (i.e., capital improvements funded directly from rate revenues).  

In supplying a reliable, adequate supply of high-quality water, at the lowest reasonable price, in an environmentally responsible manner, the District operates and maintains 55 miles of pipeline, six separate pressure zones, 377 fire hydrants, 725 valves, 93 air valves, 21 blow-offs, five booster pump stations, four pressure reducing stations, one pressure relief station, five reservoirs and three inter-tie connections. 

The District receives its water from Whiskeytown Lake which is treated at the Clear Creek CSD (“CCCSD”) Filtration Treatment Plant (“Treatment Plant”).  As such, the District is responsible for a proportionate share of all costs associated with the O&M of the Treatment Plant. 

Specific to Pressure Zone A1, numerous repairs and expenses have greatly impacted the District’s Pump Station Repair and Replacement Reserve.  In addition, this particular pump zone has experienced an increased power expense.  This pump zone is completely reliant upon pumping for its water supply which requires power.  During the times of PG&E power outages and its related Power Safety Power Shutoff events, it is necessary to use emergency generators to power these critical pumps.  This has a significant impact to the overall budget for these small pump zones.   The adjustment is needed to adequately fund the reserve.

Related to the severe drought conditions and the resulting reduced water allocation, the District has purchased supplemental water to better meet projected customer water demands.  A temporary Drought Surcharge is proposed to recover the cost related to this necessary water purchase.

Proposed Base Rate & Consumption Rate Increases

The Board of Directors held a Special Meeting on June 8, 2022 to review the proposed rate adjustments and subsequently adopted the District’s Preliminary Operation & Maintenance Budget for FY 2022-23.  Due to increased expenses associated with the cost related to water and the ongoing operation and maintenance of the District’s distribution system as well as the increased Treatment Plant costs, it was the decision of the Board to propose adjusting the Base Rates and Consumption Rates for Residential, Commercial, Industrial and Institutional customers.  Please note the Base Rate does not include water consumption. 

The proposed increases are depicted in the tables below:

Rate Stabilization Fee (RSF)

The Rate Stabilization Fee has been implemented to ensure an adequate financial reserve in addressing the variable costs related to maintaining the District’s distribution system and associated infrastructure.  The increase is necessary to bring the O&M Reserve within policy range.

Proposed Drought Surcharge

The District receives its water supply from a contract with the Bureau of Reclamation.  In February 2022, the District received notice that it would not receive a water allocation based upon its 3-year historical average of Municipal & Industrial (“M&I”) water.  As a result, the District purchased 150 acre-feet (“AF”) of supplemental water from the McConnell Foundation and 500 AF from the City of Redding.  This $273,500 expenditure will be paid using the O&M Reserve which will then be replenished by this proposed Drought Surcharge.  The proposed rate shall be charged for all consumption levels indicated below:

Recovery Period Consumption Proposed Rate  (per hcf)

    August – September                      4,000 +                                                $0.59

    October – April 2023                      1,300 +                                                $0.59

    May – June 2023                            3,300 +                                                $0.59

Proposed Water Availability Charge (WAC)

The District’s Board of Directors is proposing to adjust the Water Availability Charge (WAC).  This increase is recommended to cover increased expenses associated with the cost for the ongoing operation and maintenance of the District’s distribution system and to bring the rate current.  

Proposed Backflow Prevention Charge

The Board of Directors is proposing to increase the Backflow Prevention Charge.  This increase is recommended to cover the increased expense to have the devices tested on an annual basis per state regulation.     

Proposed Residential Rate Increase

User Comparison

The following indicates how this proposal would affect the average user’s AUGUST bill:

Proposed Zone A1 Pump Surcharge Fee Increases

Below are the proposed Base Rate Surcharge and the Consumption Rate Surcharge rate increases for the Zone A1 Pump Zone which includes examples of how this will impact the monthly billing.   Zone A has approximately 28 customers.

The following example depicts how this proposed rate increase would impact Zone A1 customers’ typical AUGUST monthly bills depending on water usage:

Proposed Rate Increase Protest Procedure

If you intend to protest the rate increases and new fees, you must submit a written protest to the District at or before the time set for the public hearing.  If a written protest is filed by a majority of ratepayers/parcel owners, the proposed rate changes and new fees will not be adopted.  

A written protest must contain a description of the parcel or parcels in which the party signing the protest owns.  A current address or assessor’s parcel number is sufficient to identify the parcel(s). If the party signing the protest is not shown on the last equalized assessment role of Shasta County as the owner of the parcel(s), the protest must contain or be accompanied by written evidence that such party is the owner of the parcel(s).  Only one written protest will be counted per identified parcel.