2024 Rate Study

State law requires revenues to align with expenses. We do not have investors and do not pay dividends. We may charge only what it costs to provide water service. 

We update the District’s financial plan yearly and study our water rates every three to five years. These industry best practices help ensure the District collects only the revenue needed to cover our costs. 

The results of the 2024 Rate Study are used to develop rates that:

• Are equitable
• Support efficient water use
• Fund and modernize our infrastructure before major service disruptions occur
• Solidify MWD’s long-term financial plan and build responsible reserve funds
• Help guide gradual, predictable future rate increases

When we update rates, we pay close attention to the District’s operational costs, the rate of inflation, and customers’ needs and priorities. This ensures we can responsibly balance the many factors that influence our rates. This careful attention shows the District’s commitment to fiscal responsibility.

Much of our service area relies on water infrastructure that is about 100 years old, so we must continually make investments to maintain a dependable, resilient system.

Each year, the District updates its Capital Improvement Projects plan, ensuring that plans for maintenance, repair, replacement, and upgrades are timed to bring maximum customer value.

Over the coming five year we plan to make significant water system upgrades:

• Planned upgrades for more than 5.5 miles of distribution pipeline. Pipeline failures are costly, can cause property damage, and lessen the water system’s reliability. This critical investment will ensure that the District’s pipelines keep the water flowing long into the future.
• The Highline Water Main project will replace 7.5 miles of 1920s-era pipeline to reduce the risk of a break interrupting water service for nearly all our customers.
• Eight reservoir replacements/retrofits. MWD is eligible for a one-time zero-interest State loan providing vital funding for construction projects to improve resilience in drinking water storage facilities.

All planned improvements are critical to safeguarding our water supply, avoiding failures, and maintaining predictable rates.

Investments in critical infrastructure are only part of the reason MWD needs to adjust rates. Extraordinary inflation, aging infrastructure, expenses for water procurement and treatment, and the need to improve system resilience have resulted in higher costs for MWD each year. We’re not alone; water costs are increasing nationwide, especially in California.

The Montecito Water District's Board of Directors is dedicated to raising rates only as needed and no more.

The short answer is no. Water bills for each customer type will still be calculated using two components:

1. A flat monthly meter fee helps the District recover the fixed costs we incur no matter how much water our customers use. The proposed rate adjustment includes a slight increase in fixed charges to better mirror the true costs of providing service and improve the stability of District revenues.
2. The second component charges customers based on how much water they use and encourages conservation by making water units more expensive as more water is used through a tier system.

If the proposed rate adjustment is implemented in July 2024, approximately 62% of customers will see a less than $20 increase in their monthly bills for the next 12 months, assuming their water consumption remains the same as it has been in the past.

Below are examples of three residential MWD customers with different water usage and anticipated changes on their bills. If the proposed rates are approved, these changes will show up on August water bills:

Even with these changes, it will still cost less than a few pennies per gallon to have water delivered to your faucet 24/7/365.

To estimate changes to your actual bill, use the monthly calculator. 

April 29, 2024: Rate Study Report reviewed at Board Meeting.

Early May 2024: Notice of proposed rate adjustments mailed to all customers.

June 25, 2024: Public hearing on adopting proposed rates.

July 2024: New rates go into effect if approved by the District Board.

• Much information about the rate study can be found here on this web page.
• We encourage customers to ask questions and participate in the upcoming Board meetings – you may view our calendar here.
• You may also contact our customer service team for assistance with the rate calculator or other questions during regular business hours, Monday through Friday, 8 am-12 pm and 1 pm-5 pm, at 805.969.2271.
• To receive ongoing timely announcements, customers may also sign up for e-News  at: montecitowater.com/enews