The Idyllwild Water District approved a proposal to create a new water billing tier last week. Currently, the majority of residential customers pay a flat fee of $28.70 for the first 3,740 gallons used each month. Usage of more than that amount costs less than a penny per gallon.

But Resolution 693, which was approved 4-1, will now charge most residential customers on a per-gallon basis for consumption greater than 1,870 gallons. The maximum charge for the next 1,870 gallons would be $13.27. So, the same 3,740 gallons — assuming it is all used — will cost $41.97 under the new rule.

All other customers also will have the volume of water provided for a flat fee reduced by 50 percent and begin paying on a per gallon basis for the difference. No changes were made in the usage for the higher tiers above these levels.

“Our pricing is very low compared to a lot of districts,” said General Manager Tom Lynch.

The change, along with the previously approved 6-percent rate increase, is estimated to generate another $192,000 for IWD, according to Financial Officer Hosny Shouman. The current 2014-15 water revenue projection is $1.1 million.

However, Director John Cook recognized that the proposed change embedded two conflicting objectives. One was an increase in revenues, during a period when dropping consumption also reduces revenue. The second is an effort to encourage conservation during water emergency Stages 2 or 3.

He recommended that the proposed new tier be implemented only during a declared Stage 3 emergency. “In Stage 3, we need additional revenue and customers use less water, but we need the funds to pay our bills,” he said.

He also recommended that the new tier be set at a level that encouraged conservation and helps educate customers about the appropriate usage levels. “The 250 cubic feet [1,870 gallons] is arbitrary,” Cook noted. “What is the typical residential usage if they conserve in Stage 3?” he asked rhetorically.

If the flat fee amount were based on typical usage and conservation, then customers who exceeded the target would not be conserving, he said. He argued for a level that would send a message from the district.

In response, Shouman said that if the new tier proposal were limited to Stage 3, the additional revenue would not be sufficient to support IWD’s water capital improvement program and, consequently, reserves would continue to decline.

“If we keep the status quo, we’ll lose the capital program and take a chance of catastrophic failure. We would have no choice but to use reserves,” Lynch replied.

During a Stage 2 condition in fiscal year 2001-02, the average usage per IWD customer was nearly 5,000 gallons per month. During the current Stage 2, average consumption has fallen to 3,700 gallons per customer, a nearly 25-percent decline.

Cook’s colleagues agreed to look at the current rate structure for the various water stages, particularly Stage 3, at a future meeting. While he was grateful, Cook still opposed the resolution creating the new tier. He felt strongly that this policy should be deferred until the board had made decisions about a business plan and a long-term capital improvement plan, and discussed what an appropriate reserve amount should be.

After adopting this change, the board officially set Sept. 10 as the date for a public hearing on the proposed sewer-rate increases.

During his discussion of work in progress, Lynch reported that IWD’s well levels are “holding or slightly diminished.” The recent rain has had little effect on the wells and Foster Lake remains dry, Lynch said.

IWD’s July water usage was 9.7-million gallons, a 1.6-percent increase above the 2013 usage. However, for the first seven months of 2014, total usage (49.3-million gallons) has dropped nearly 11 percent compared to the same period in 2013 (55.3-million gallons).

In the next few weeks, Lynch plans to test some of the Southern California Edison recommendations for reducing electric costs. He will use two similar wells. “… one we will operate as we normally have and the other will be operated with different procedures,” he told the board. “We’ll see if we can achieve projected efficiencies. If we do, we could save substantially on pumping costs.”

The new Tollgate tank has been inspected by the State Public Health Department and is being filled and shortly will be a new addition to the distribution system, according to Lynch.