Why did Nevada County Sanitation District conduct a rate study?
• Three primary reasons drive changes to service charges; increasing regulatory mandates, aging infrastructure, and inflation. It is common practice to conduct a rate study every four to five years. The last rate increase in any of the District’s sewer zones was in 2010/11, with some zones not seeing an increase since 2004. In the future, the District will be conducting one every five years. The District has continued to perform standard operations and maintenance, major repairs, and critical upgrades to the sewer system utilizing existing funds. Now these funds need to be bolstered due to increasing costs related to utilities, general liability insurance, materials, and construction as well as fuel and equipment costs.
If I have wastewater service provided by another utility or am on private septic, will I see any of these fees?
• No. Nevada County Sanitation District does not manage any utilities inside of the city limits of Grass Valley or Nevada City, and we do not oversee private septic systems. Only existing NCSD Sewer Zones are included in this study and resulting rate adjustments. Those communities are:
o Lake Wildwood – Zone 1
o Lake of the Pines – Zone 2
o North San Juan – Zone 4
o Gold Creek – Zone 5
o Penn Valley – Zone 6
o Mountain Lake Estates – Zone 7
o Cascade Shores – Zone 8
o Eden Ranch – Zone 9
o Higgins Villiage – Zone 11
o Valley Oak Court – Zone 12
Where has the money gone from the pay rate adjustments?
• The money has funded the maintenance and repairs of the sewer collection and treatment system and current infrastructure throughout the District's service areas. Much of the current infrastructure was put into place in the 1970’s with various updates and expansions taking place each decade to follow. For example, maintenance costs for one mile of pipeline that might need to be replaced can cost almost $1 million per mile, and a major piece of equipment in one of our plants costs around $800,000. These costs add up as we work to keep our systems safe, reliable, and prepared for customer needs 24 hours a day, 7 days a week, 365 days a year.
Why are our rates higher than those of some surrounding communities?
• Every community has different conditions that affect the ability to provide safe and reliable sewer service. The primary reasons that Nevada County Sanitation Districts sewer rates are higher than those of some surrounding communities are:
A large number of sewage pump stations
Nevada County Sanitation District has more pump stations than a typical municipality because of its terrain. The same features that make Nevada County so beautiful to live in, increase the difficulty to transfer wastewater from the community where it is generated to the Wastewater Treatment Plant to be treated. These pump stations help sewage flow past an elevated area, such as a hill, by pumping or lifting the sewage from a lower to higher elevation. Once past the elevated point, the sewage can flow downhill again via gravity. Pump stations are expensive to operate and require a large amount of staff time. In addition, failures can result in sanitary sewer overflows and fines from the state. Gravity is the most cost-effective way to transport water and wastewater.
Small size of the utility system
Because Nevada County Sanitation District operates 10 small utility system zones, it does not benefit from the economies of scale of a larger system that can spread the costs of operations among more customers.
In addition, because small communities deal with smaller amounts of gross funds, they need larger savings levels to be fiscally sound and to satisfy criteria established by bond rating agencies that assess the town’s creditworthiness. A reasonable savings level — also called “fund balance” or “reserve funds” — for a utility is critical to ensure the District does not have cash flow problems and can handle unexpected revenue shortfalls, expenditure overruns, and emergencies. District policy, and the current rate study, recommend maintaining an undesignated fund balance of 50 percent of annual operating expenditures.
Commitment to care for the utility system, customers, and environment
Water and sewer services are expensive to provide. When it comes to maintaining its drinking and wastewater infrastructure, the United States fails as a whole, earning respective grades of D and D+ in the 2017 Infrastructure Report Card from the American Society of Civil Engineers. The grades are slightly better in California — with a C- for wastewater infrastructure, according to the 2019 Report Card for California’s Infrastructure. Often there is a reluctance to raise rates to recover the costs associated with providing sewer service, notes a video (Full Cost Pricing of Water-YouTube, https://www.youtube.com/watch?v=HczNWbVuFh0&t=4s ) on full-cost pricing of water, provided by the Environmental Finance Center at UNC-Chapel Hill.
NCSD strives to do better. Our operations approach includes taking care of what we have. Your Sanitation sewer bill reflects your contribution to the labor and the physical infrastructure required to have wastewater removed when desired and safely returned to the environment. The District does not make a profit from providing sewer service nor does it use sewer revenue for purposes other than the operation, maintenance, and improvement of the District’s sewer system.
Has the District done anything to lower sewer rates?
Self-Performing Work
The District has taken on all but the very large or very complicated work that has traditionally been sub-contracted out. These include tasks like manhole and pipe rehabilitation and repair, sludge removal, submersible pump rebuilds, lift station mechanical rebuilds, aeration header repairs, emergency pipeline replacements, permanent standby generator replacements, and some large treatment plant equipment rehabilitations. Self-performing this work allows for cost savings by the District including not being subject to contractor markups for materials, equipment, and labor. Self-procurement of the equipment and replacement parts allows us to “shop around” for the best pricing for higher quality components.
Zone Consolidation
After careful evaluation, the District realized cost savings might come in the consolidation of several of the closer zones. This will reduce maintenance, operating, and administrative expenses. The construction of the infrastructure needed to consolidate sewer zones that have been completed. Fiscal year 21/22 will see five sewer zones consolidated into two sewer zones utilizing this new infrastructure. The 1st consolidation will involve the Lake Wildwood, Penn Valley, and Valley Oak Court treatment systems, which will be merged into one treatment zone. The 2nd consolidation will merge the Lake of the Pines and Higgins Village systems into one treatment zone. These consolidations will allow, not only the shared use of treatment facilities but will also help reduce operations cost by combining maintenance and administrative expenses. The consolidations will also see three of the five wastewater treatment facilities decommissioned saving the need for expensive upgrades and regular maintenance.
What is the process for raising sewer rates?
Nevada County Sanitation District operations are designed to be a self-contained enterprise, meaning revenues from user rates must be used for purposes of providing those services. Revenues from sewer rates cannot be used for general County operations.
NCSD periodically reviews the current rates to assess suitability with operations. As utilities, environmental regulations, operational expenses, and required capital improvement costs rise, these costs cannot be covered without corresponding rate increases.
This process began early last year when the Nevada County Sanitation District issued a contract to HF&H Consultants, a firm that specializes in water and sewer rate studies, to assist Staff in the process of conducting a comprehensive sewer rate study.
This study lasted several months and was a coordinated effort between the Districts Finance Department and Public Works Department in providing financial, operational, and capital improvement project information to HF&H. The primary objective of the study was to
1) develop a financial plan that meets the current and future obligations of the sewer district, while meeting required debt service coverage ratios and reserve requirements,
2) review the connection between the costs of providing service and the rates charged to customers of the district, and
3) design a rate structure to assist in achieving NCSD’s goals and objectives.
Official notices were mailed out the week of May 3rd, 2021 to advise all customers of NCSD’s intent to increase rates as required by Proposition 218. The notice included the date of the public hearing: June 22, 2021. The proposed rate adjustments and increases, if adopted, would go into effect on July 1st of each of the next 5 years (2021-2026).
Who do I contact if I want to protest?
• All questions related to the rate study, the Sanitation District, the 218 process or questions related to the desire to protest rate adjustments can be sent to NCSDrates@co.nevada.ca.us. For more information, please call (530) 265-1411.
If you wish to submit a protest, protests must (1) be in writing, (2) state which utility service rate adjustment(s) the identified property owner or tenant is protesting, (3) provide the location of the identified parcel by street address or assessor’s parcel number, and (4) include the name and signature of the property owner or tenant submitting the written protest. Only one protest will be counted per identified parcel.
Written protests may be hand-delivered or mailed to:
ATTN: Nevada County Clerk of the Board
Public Hearing on Proposed Sewer Service Charges
950 Maidu Avenue, PO Box 599002
Nevada City, CA 95959-7902
on or before the public hearing date, or hand-delivered in person at the public hearing at the Regular Meeting and Public Hearing of the Nevada County Sanitation District Board of Directors on Tuesday, June 22 at 1:30pm. To be counted, written protests must be received before the close of the public comment portion of the public hearing. Any protest submitted via email or other electronic means will not be accepted as a valid written protest.
If I have multiple properties that are served by the District, and they each have a tenant, how many protests can I/we submit?
• Only one protest will be counted for each parcel that receives service. If a property owner and a tenant submit a written protest for the same property, only one of those protests will be counted.
Can I submit a protest letter if I am not currently a ratepayer in one of the Sanitation District sewer zones?
• If you submit a written protest for a property that is not inside of the Sanitation District boundaries or is not receiving service from the Sanitation District, the protest will not be counted.