Rate Increase Glossary & FAQs


  1. Equivalent Dwelling Unit – EDU

    One single-family residential household that is a sewer and water industry standard unit of measure by which the user is charged for sewer services provided by the District. It is utilized to ensure an equitable and proportional allocation of costs and rates across all customer classes and types. It also serves as the basis by which commercial billing units are calculated.

  2. Base Rate

    Cost to have safe drinking water available to a property and/or for the property to be serviced by the sewer system. This cost is to keep the systems operational on an ongoing basis and to complete necessary maintenance and improvements.

  3. Federal/State Mandate Fee

    Fee that covers compliance with and upgrades required by mandated federal and state air quality regulations for District vehicles, equipment, and emergency generators.

  4. System Replacement Fee

    Fee that is utilized for infrastructure improvement, rehabilitation, and replacement projects only.

  5. Capital Improvement Plan (CIP)

    The District’s multi-year plan of infrastructure improvement, rehabilitation, and replacement projects.

  6. Cost of Service Study

    Utilized to determine whether existing rates and property tax revenues are sufficient to meet the system rehabilitation needs as well as the operational costs for the District’s sewer and water system. It also ensures rates are equitable and proportional, and in compliance with industry best practices and California State Law.

  7. Customer Class

    Categories of customers classified according to the characteristics at each property (e.g. single-family residential, commercial, irrigation, multi-residential, fire system).

  8. Rate Maintenance

    A term describing regular rate increases to cover annual cost increases due to inflation, construction cost escalation, and the regular cost of doing business.

  9. Proposition 218

    Approved in 1996 by voters to amend the California Constitution by adding articles XIII C and XIII D. Among other things, Article XIII D established procedural requirements for levying assessments and imposing or increasing property-related fees and charges, such as water and sewer rates. Proposition 218 also restricts the use of the revenue collected from such fees and charges and the amount of the fee or charge that may be imposed on each parcel. It requires that each District customer class only be charged only what is required to cover their respective proportional cost of service.

    Proposition 218 requires local governments to identify the cost of service and provide written notice of proposed changes, including holding a public hearing(s), to all affected property owners and customers. Additionally, Proposition 218 provides a means for the affected property owners and customers to protest proposed increases.

  10. Fiscal Year

    A year identified for tax or accounting purposes. The District’s fiscal year is July 1 – June 30th.

  11. O&M - Operations and Maintenance

    On-going operations and maintenance of the water and sewer systems and its associated costs.

  12. Sewer and Water Infrastructure Terminology

    Pump Station – A facility with pumps, electrical, and control equipment to lift water or sewage up hill.

    Distribution Main Pipeline – Underground pipe for conveying and distributing potable water into the District’s service area and to its customers.

    Collection Main Pipeline – Underground pipe for collecting wastewater from District’s customers and conveying it to the District’s sewer pump stations.

    Force Main Pipeline – Underground pipe for conveying wastewater through the District's pump stations and to the Tahoe-Truckee Sanitation Agency in Truckee for treatment.

    Reservoir – A potable water storage tank. The District’s eight reservoirs vary in size from 350,000 to 1.3-million gallons.

Frequently Asked Questions

  1. Why are the rate increases necessary?

    The average age of the District’s water and sewer infrastructure is approaching 50 years old, and despite continuous maintenance and system investment, much of that infrastructure is approaching the end of its service life. There is also significant investment necessary to expand fire flow coverage within our service area.

    In 2015, the District launched a comprehensive condition assessment effort including video inspection of all 73 miles of sewer collection main pipeline and leak detection across 53 miles of water distribution pipelines, as well as physical inspection and assessment of our sewer and water pump stations, water storage reservoirs, groundwater wells, and water treatment plant. Following completion of the assessment, a comprehensive Capital Improvement Plan (CIP) was developed that identifies over $51 million in necessary system rehabilitation in the next 20 years and $18.5 million in the next five years.

    Existing rates and property tax revenues are not sufficient to fund these necessary investments in our infrastructure and meet on-going operational and maintenance costs.

  2. How did the District determine the amount of the proposed water and sewer rate adjustments?

    In 2018, the District hired HDR, an experienced, independent engineering consultant in the water and sewer utility industry to conduct a cost of service study that examined current, and projected revenues as well as evaluate O&M expenses and determine an adequate funding level for our utilities. HDR began a comprehensive cost of service study to determine whether existing rates and property tax revenues were sufficient to meet the system rehabilitation and replacement needs as well as the District’s operational costs for the water and sewer systems. Our rate structure was also assessed for compliance with industry best practices and California state law. California Proposition 218 requires each customer class be charged only what is required to cover their respective proportional cost of service. Importantly, sewer rates can only be used to fund sewer system costs, and water rates only to fund the water system costs.

    With the study now complete, the District has determined annual rate increases are necessary over the next five years in order to continue providing reliable and sustainable sewer and water services into the future.

    The proposed increases to monthly sewer and water rates are triggered by many factors including:
    • Identified infrastructure improvements necessary to address end of service life system rehabilitation and replacement
    • Significant escalation of construction costs
    • Inflationary increases in supply, material, labor, and utility costs

    Additionally, we identified necessary rate restructuring to ensure continued compliance with Proposition 218. As a result of this rate restructuring, the bill impact of the proposed rate increases will not be the same across all customer classes, and some water customer classes will see a decrease from their current water bill.

  3. Why is this only covering five years if you have looked at your needs over 20 years? What is going to happen after the five years are up?

    Proposition 218 mandates a maximum period of five years for rate setting. Upon conclusion of the current five-year rate period, the District, upon direction from the Board of Directors, can undertake a new cost of service study to again evaluate District utility costs and rates with the goal of conducting regular rate maintenance into the future.

  4. What happens if the water and sewer rate adjustments are not approved?

    If the rate adjustments are not approved, the District will cancel planned capital improvement projects and roll back the timeline by which these necessary investments can occur. The District will see more frequent equipment and infrastructure failures resulting in increased service outages, spills to the environment and Lake Tahoe, and operational impacts. Replacement costs will increase, and costly emergency repairs, along with regulatory fines, will become more frequent. Additionally, build-out of water system improvements specifically focused on firefighting flow, capacity, and availability will be delayed or outright canceled.

  5. When was the District's last major rate change?

    The last significant rate adjustment was approved by the District’s Board of Directors on October 16, 2007, and the District has worked hard over the last decade to maintain stable and affordable rates. However, we must move forward with necessary infrastructure rehabilitation and replacement before our sewer and water system begins to see significant failures. Even with the proposed adjustments, over the next five-year rate period, the District’s rates will remain among the lowest of sewer and water service providers in the region.

  6. When would new rates take effect?

    The proposed rate transition plan identifies adjustments annually for the next five years. The first-year increase will take effect on January 1, 2020, if the Board of Directors approves the increase at the Public Hearing on November 12, 2019.

    The proposed rate adjustments are then voted on annually by the Board of Directors as part of the District’s annual budget process, subject to the maximums established in the Proposition 218 process. Each of the subsequent year increases would take effect on July 1st, the beginning of the District’s fiscal year. These increases would be on July 1 of 2020, 2021, 2022, and 2023.

  7. Can conserving my water reduce my monthly cost?

    YES! Depending on how much water you use each month, reducing your water usage will likely save on your monthly water bill.

    The usage tiers were developed based on District customer water use trends. Tier 1 is based on consumptive or indoor use and was created using winter data. Tiers 2 and 3 is for additional use generally for landscaping, irrigation, pools, etc.

    Thanks to a grant from the State of California, the District is offering rebates for a variety of appliances, as well as for weather smart irrigation controllers.

    More information: https://ntpud.org/how-conserve-water

  8. We only use our house part of the year, why do we have to pay?

    District water and sewer systems operate 24 hours a day, 7 days a week, 365 days a year. System maintenance and improvements must be completed throughout the year and these fixed costs are funded by water and sewer base rates. The rate structure is based on a cost of service analysis that includes these fixed costs to cover non-consumption expenses such as customer service and billing, O&M of the water and sewer systems, and public fire protection that benefit all of our customers on a year-round basis. Additionally, water and sewer rates cover infrastructure improvement, rehabilitation, and replacement projects that are necessary to ensure safe, reliable, and continuous operation of our water and sewer systems.

  9. Are my rates used to provide parks and recreation services?

    California Proposition 218 mandates that revenue from water service may ONLY fund water service and revenue from sewer service may ONLY fund sewer service. Absolutely no revenue from either water or sewer rates can be used to fund Parks and Recreation or any other expense of the District not directly related to providing water or sewer services.

  10. How can I get more information?

    Please call the District (530) 546-4212 or visit https://ntpud.org/rates