Western Municipal Water District

California

As a member agency of MWD of Southern California, Western Municipal Water District provides water and wastewater service to approximately 24,000 retail and 8 wholesale customers in western Riverside County. Like many utilities in California and across the country, in 2009, the District had seen a significant reduction in demand due to the economic recession, the increase in water conservation awareness, drought conditions, cooler weather, and a variety of other factors, which resulted in a decrease in the District’s revenue. To ensure revenue stability at this reduced level of customer demand, while also promoting efficient water use and meeting the California regulatory requirements of SBx7-7, RFC assisted the District in the development and implementation of a water budget rate structure.

First, RFC identified and examined three potential water budget rate structures for the Murrieta and Riverside service areas. To analyze the impacts of these potential rate structures, RFC developed a Microsoft Excel-based water budget rate model. The model allowed the District to change the key factors for water allocations, provide revenue and impact analysis, and generate sample customer monthly bills under existing and proposed rates. RFC conducted meetings and workshops with District staff and the Board to analyze various rate structure scenarios to ensure that the new structure would meet the District’s objectives. Through these meetings, a water budget rate structure was selected to effectively meet the District’s needs, and this structure was successfully adopted.

Since the adoption of this water budget rate structure, the District has increased revenue stability, promoted water efficiency, and increased customer satisfaction.

In addition to developing the water budget rate structure, RFC also developed a customized, long-term 30-year financial plan model to help the District  financially manage all 14 of its enterprises. This comprehensive yet user-friendly model is used to facilitate communication between staff and the District’s Board of Directors about the financial implications of different financial policies and capital improvement projects. The model also assists with coordination and decision making between engineering and finance staff as they work to prioritize capital projects and define a capital financing plan to achieve a sustainable and achievable solution. The model includes a variety of tools to allow the user to view and analyze various aspects of the District’s long-term financial plan including:

A CIP manager to save customized CIP scenarios to be used for financial implication evaluations

A scenario manager to save, load, and compare the results of different assumptions, inputs, and CIP scenarios

Customized financial reports in preset printed format that can be generated at the individual enterprise or aggregate level

A rate calculation module

Since 2011, RFC was also retained by the District to develop and update the connection fees for the District’s retail water and wastewater services. For this project, we worked closely with District staff to develop a connection fee framework. We then developed a connection fee model to evaluate different policy options related to allocations of tertiary recycled water treatment to potable, wastewater, and to calculate the connection fees for these services. Finally, RFC conducted a workshop with District staff to present the results of the project.  In 2014, the District updated its Water and Wastewater Master Plan for all service areas, and requested RFC update the connection fees using the most up-to-date capital costs and other relevant financial information.