Serious Water Shortage

City Imposes Restrictions • Announces Modified Fee Structure

Coalinga residents will be paying a lot more for their water usage when they use an excess of 15,000 gallons per month. There is a structured cost increase for customers who use amounts greater than the allotted 15,000 gallons of water per single-family home.

California Governor Gavin Newsom declared a “drought emergency” on May 10, 2021. A mandate was issued, stating that residents in Coalinga, along with many other communities, must reduce water usage by 25 percent.

Droughts in California are nothing new. Based on the former success of California residents to reduce their waster use in other years of drought, Newsom was optimistic about residents there being able to provide significant relief from the current drought.

Local leadership has reviewed data provided by Dan Bergmann, who represents IGServices, an agency that deals with resources. He explained the seriousness of the current situation.

Coalinga City staff proposed a plan for Coalinga’s conservation efforts at last week’s Coalinga City Council meeting on July 1. This system uses a “numbers” approach instead of the traditional code enforcement approach. Using the code enforcement approach meant city staff and neighbors watching for and reporting ‘noncompliance.’ The newly approved approach will track customers’ compliance by comparing water usage in the current billing cycle to the same billing cycle last year.
In its report, the City of Coalinga stated, “The numbers approach allows customers flexibility how they conserve water to meet the specified requirement and does not require increased code enforcement activity.”

According to the resolution, the restrictions and drought charges apply for three billing cycles only: July/August, August/September, and September/October. City Council will need to agree to extend the restrictions before October 1st if they plan to continue special restrictions beyond Stage II. The time frame is limited because, according to United State Bureau of Reclamation, (USBR), “Conservation is most critical in the summer months and USBR may have additional water available in the fall season.”

Conservation for single-family residential customers is primarily focused on above-average water users. Single-family customers using below the summer median volume of 15 thousand gallons per month will not be penalized at all. However, single-family customers using above 30 thousand gallons per month (twice the median), will pay for all volumes above 30 thousand gallons at the drought rate. “Drought Rate” is significantly higher than normal pricing.

Looking at data from last year, 22 percent of single-family customers used more than 30 thousand gallons per month. Another group of customers used very high volumes of water. Those customers would have to pay for the amount of water overage at the drought rates.

For this water conservation emergency, Coalinga City staff proposed a “numbers” approach instead of the traditional code enforcement approach. Instead of relying on code enforcement and neighbors to report water-use noncompliance, the proposed approach measures degree of compliance by looking at exact water usage.

The city will also provide customers with data comparing water usage in the current billing cycle to the same billing cycle last year. The numbers approach allows customers flexibility how they conserve water to meet the specified requirement and does not require increased code enforcement activity.

All Coalinga single family customers will receive information about their water usage for the previous year, their individual conservation requirement, and potential drought charges if they do not comply. Customers will also receive information on how to read their own water meters so they can be aware of their exact water usage. The first letters should be received very soon.

Additionally, City staff will use various forms of communication to inform the community of general terms of the water conservation emergency.

The proposed approach will also require application of drought charges to be added manually to each account out of compliance. Additional administrative costs will be covered by the additional drought charges. Staff will strive to incorporate drought charges timely on the next billing statements sent to customers.

The newly adopted resolution specifies restrictions and drought charges apply for three billing cycles only: July/August, August/September, and September/October. City Council will need to act again prior to October 1st, to continue special restrictions beyond Stage II. The time is limited because, according to USBR, conservation is most critical in the summer months and USBR may have additional water available in the fall season.

Conservation for single-family residential is focused primarily on above-average water users. For example, single-family customers using below the summer median volume of 15 thousand gallons per month will not be penalized at all. However, single-family customers using above 30 thousand gallons per month (two times the median), will pay for all volumes above 30 thousand gallons at the drought rate. See the attached distribution of single-family customer bills from last July illustrating that 22 percent of customers use more than 30 thousand gallons per month, and further, that a smaller group of customers uses very high volumes of water.

The proposed approach requires effective, proactive communication with customers to inform them of their usage the previous year, their individual conservation requirement, and potential drought charges if they do not comply. Customers will also be provided material showing how to read their meters such that they can determine conservation achieved. The first letters must be sent within a few business days of City Council approval of this approach. Additionally, City staff will use various forms of communication to inform the community of general terms of the water conservation emergency.

The proposed approach will also require application of drought charges to be added manually to each account out of compliance. Additional administrative costs will be covered by the additional drought charges. Staff will strive to incorporate drought charges timely on the next billing statements sent to customers.

The proposed drought rate for non-compliance volumes is $7.50 per thousand gallons. This cost of water is based on indicated current market values for wholesale water at $2,000 per acre foot, compared to the City’s long-term, contracted total cost for wholesale water delivered of approximately $300 per acre foot. Compared to the standard residential rate of $2.28, the drought rate is 3.3 times higher. For implementation, customers will be billed for all volumes at the regular rates. To the extent a portion of the volumes billed are non-compliant, an additional line item will be added called “Drought Charge” that will be based on ($7.50 – $2.28, single-family rate) times the volume out of compliance. This way application of the drought charges can work with the existing billing rates.

Non-residential customers are required to conserve between 20 and 30 percent, as specified in the resolution. Drought charges will apply to all volumes not in compliance with the specified conservation goals.

Pleasant Valley State Prison has indicated the ability to conserve five percent below last year, and Coalinga State Hospital indicates no further conservation. For application of drought charges to be equitable across customer classes, these institutional customers must also pay for noncompliance volumes.

Staff has met with the city attorney to present the proposed approach for compliance with applicable laws and regulations. The intent of the drought charges is to incentivize customers to conserve water. Customers that conserve water as required will not incur charges. Drought charges are focused on customers using above summer-average volumes of water and do not penalize customers using small volumes. Further, these charges are in place for three billing cycles only, then must be revisited by city council to continue them. Finally, the basis for the drought rate is not punitive but rather based on indicative costs for wholesale water in the current drought marketplace.