The Fourth District Court of Appeals recently issued a decision in the case “Capistrano Taxpayers Assn v. City of San Juan Capistrano.” The case involved a challenge to a rate structure adopted by the City of San Juan Capistrano.

While this court case has attracted much attention, the court ruling did not invalidate tiered rate structures. The court simply affirmed that to be in compliance with Proposition 218 each price tier must be based on the water district's cost of service. The IRWD budget based conservation rate structure complies with these requirements. 

In addition, while the case is fact-specific to San Juan Capistrano, the clarity provided by the court will be helpful to water agencies in ensuring that their rate structures conform with the requirements of Proposition 218.  As we continue to review the decision, we will evaluate any potential impacts to IRWD.

The timing of this decision coincides with California experiencing record drought conditions. The Irvine Ranch Water District understands the importance of preserving California’s water supplies, especially in times of drought, and has taken many steps to encourage water use efficiency. The IRWD budget based rate structure promotes water efficiency and is based on the cost of service; is equitable and fair; promotes sustainable behavior change; has shown to be effective in reducing water use; and is supported by Governor Brown in his Executive Order on Water Restrictions issued on April 1, 2015 that calls on water agencies throughout California to implement structures that promote conservation. IRWD’s budget based rate structure has been recognized by the State Water Resources Control Board for producing superior water savings and is an approved alternative approach for compliance with current California Drought Emergency Conservation Regulations.

Please click here to read our technical briefing paper as well as the water savings results produced by the IRWD budget based rate structure .

IRWD is asking customers to help us meet the statewide drinking water reduction mandate issued last month by the State Water Resources Control Board. In order to meet this mandate, IRWD has determined that our customers need to cut their outdoor watering in half.

To assist customers in helping us meet this challenge and because of the ongoing drought conditions, we will be reducing the monthly outdoor water budget. This water budget is the amount of water a customer receives each month to irrigate their garden.

Effective July 1, 2015, the outdoor monthly water budget will be based on drought tolerant landscape irrigated with a water efficient system such as drip. It will no longer be based on warm season turf.

Customers who maintain their current watering schedule and have a lawn, will likely be over their budget in July and their water bill will go up.

Customers can help us reduce the use of drinking water and keep their bills low by:

• cutting outside watering in half
• letting your water-thirsty lawn go brown
• getting ready to install drought tolerant landscaping in October
• and fixing water leaks which are often a hidden cause of water waste.

Will IRWD be issuing fines? At this time, IRWD will utilize an alternative method to discourage water wasters. Customers that exceed their monthly water budget will pay significantly more for their water use. The price increases will be assessed through the budget based rate structure.

Will IRWD Limit Outdoor Watering to 2 Days Per Week? No. IRWD will use the budget based rate structure to limit outdoor watering. Rather than specifying which days a customer can water their yard, IRWD will assign each customer a monthly water budget tied to the cost of service. This approach complies with the state emergency drought regulations and promotes long term behavior changes by sending a strong price signal that something is wrong, maybe a water leak or broken sprinkler timer. Customers are able to fix these problems and understand how they cause water over use.

IRWD applauds the action by the Governor to call for water agencies throughout the state to implement new pricing modules that discourage excessive water use because they will not only continue to reduce water use and demand during the current shortage, but will also result in sustained conservation gains. A key component of the District's efforts to reduce water use has been through the use of budget based rate structures which discourage overuse by using a meaningful tiered pricing structure for any inefficient water use.

The District has used a budget based, tiered rate structure for nearly twenty-five years, and has continued to refine its rate and budget structure to promote wise use of water. Implementation of IRWD’s budget based tiered rate structure, in addition to other measures undertaken by the District, has provided superior savings compared with imposing a mandatory ban on outdoor irrigation.

A technical fact sheet on the IRWD Budget Based rate structure is available here.