Potential water rate hikes will be on the table Tuesday at the Merced Irrigation District board of directors meeting.
The MID board last month voted unanimously to explore increasing the money farmers pay for water to help the district cover a projected $10.6 million revenue shortfall. With far less water to sell to growers and other users because of the drought, the district expects significant declines in revenue.
John Sweigard, MID’s general manager, said the district has a “long-term planning process” in place.
“Unfortunately, we have this three-year drought that is causing us some short-term pain,” Sweigard said. “The board will discuss how to get through this period as we look forward to a long-term resolution from the planning process.”
The board will consider one of six scenarios that are outlined in a consultant’s report that will be formally presented at Tuesday’s meeting.
One proposal would raise water rates to just over $100 per acre-foot of water. Last year, the district charged $23.25 per acre-foot. An acre-foot is the amount of water it would take to cover an acre of land 1 foot deep, or about 325,900 gallons.
Rates will not be increased Tuesday, rather, the board will consider whether to move forward in the process of raising rates before the irrigation season begins in April and likely will set the amount of the possible increase and schedule a public hearing, according to the MID staff report released late last week.
The earliest a public hearing, or protest, could be scheduled would be April 18, according to the staff report.
Any rate increase would have to be approved by ratepayers, Sweigard confirmed.
Without a rate increase, the district would not be able to meet its “revenue obligations,” which would likely affect its bond rating and credit, according to the staff report.
Amanda Carvajal, executive director of the Merced County Farm Bureau, said every farmer is feeling the stress of the drought and that every water district in the region is having similar discussions. The Farm Bureau has not taken any formal position on raising the price of water, she said.
“But these are very necessary discussions right now,” Carvajal said. “Farmers are already starting to plant row crops, and budget issues for districts require a very frank discussion.”