Hiker on Hiking Train in Marin Municipal Water District watershed

FAQ

The predictability of the water supply is the most pressing problem and will be for the foreseeable future. This has always been the case, but precipitation variation continues to shift due to climate change and the decreasing population-to-storage capacity ratio for both ourselves and our suppliers. From The Annual Comprehensive Financial Report for the years ended June 30, 2023 and 2022:

Average annual precipitation varies across the drainage basins above the reservoirs from about 60 inches above Kent Lake to 28 inches on Walker Creek, according to rainfall records maintained by the District since its inception. Average annual net runoff on the watershed lands is more than 75,000 acre-feet. That runoff, however, can vary greatly from year-to-year. For example, the District measured record runoff of 213,000 acre-feet in 1982-83, compared with a low of 3,000 acre-feet in 1976-77.

Luckily for us, we’ve always had a long dry season, so long-term storage is a familiar problem, unlike, say, in the Bahamas, where they rely on weekly rains to fill front and backyard cisterns for their water needs.  We also don’t rely on out-of-sight, out-of-mind aquifers, which is good because you don’t have to convince the public it’s a problem.  But twenty-two percent of our water comes from outside sources that are NOT guaranteed. Over ninety-five percent of these sources are drought-vulnerable. I think the only logical answer is potable, recycled water.  Our district would not even have to be an early adopter. The EPA published a compendium in 2017, and the State of California Office of Administrative Law approved regulations for this kind of system, effective October 1, 2024, and is offering grants to districts that implement these systems.

https://www.waterboards.ca.gov/drinking_water/certlic/drinkingwater/direct_potable_reuse.html

https://watereuse.org/california-takes-next-key-step-implementing-direct-potable-reuse/

https://www.waterboards.ca.gov/water_issues/programs/grants_loans/water_recycling/

It would be a predictable source of water that would be far cheaper and environmentally friendly than desalination, reservoir expansion, or the recycled water program the district is currently implementing, which requires double the infrastructure (two sets of pipes). That is not feasible in most applications and only serves to increase building costs at a time when it is particularly critical that we streamline and encourage housing construction. I spoke to the General Manager of MMWD, Ben Horenstein, and it was fascinating. He outlined the design challenges but he also said it was the brass ring of water management so I think we should definitely be laying the groundwork for this as a solution. And thinking more on it, we might even be able to get a grant to do a more ambitious, synergistic project given our natural landscape. In Europe they are constructing large water “batteries,” I could see how this could be incorporated to overcome some of the constraints we discussed. Given the tepid residential conservation gains, even though Marin is an award-winner in conservation, I don’t think this is a viable, cost-effective solution.  What I think if we keep pushing in this direction is that the people who can afford to will not conserve past the point of pain, and the people who feel the cost of their monthly water bills more acutely will be the ones forced to do without.  I don’t see us getting to the point of Mexico City, but that’s the extreme if you keep counting on conservation to be your savior. Ross is the worst at conservation. One only needs to look at the use map from the water efficiency program update presented on August 21, 2024, to see the proof of this.  Ross being the worst at conservation.

One calculation I would like to know is how much the district spends per acre/ft of water conserved.  I would further break that down into how much was saved in the months we really needed water saved as opposed to the months the district itself is letting out water through the spillways due to excess supply.  For instance, a cistern program makes no sense in our area unless you have room and the capital to buy and store a whole lot of barrels because of our long dry season. I did the calculations when I was considering installing a cistern to replace our old swimming pool.  There was no way to even come close to having a cistern pay for itself.  Cisterns work great in the Bahamas, but not so much here.  Here, at worst, they encourage mosquitoes if not fastidiously maintained.  They do have the benefit of doubling as earthquake readiness, so there might be a little added value there. We’ve been working on conservation since the 1950s. We should not waste water, but conserving what you don’t have means you’re getting into the haves and have-nots territory. It’s also hard to conserve when you drive down Hwy 5 and see farms still squirting water into the air, but that’s out of our jurisdiction. My point is that there are diminishing returns with conservation, and it doesn’t work past the point of pain for the most affluent; we need to assess where we are at with these programs because it sure looks like we’re paying a lot for meager gains at this point. It could be the money will have a better return if invested in the larger system which can take advantage of the incentives the state is offering for recycled water projects.

It’s hard not to think about wildfire when you live in California. And the technologies used to address this risk seem so crude. Not that they don’t have merit, but I would be on the lookout for new ideas about addressing these risks. The water district is looking at modeling the movement of fire, which is an excellent place to start as is their Fire Flow Improvement Program. What I would like to game out in the near future is our plan if there is a fire. Fire can do a real number on the water supply. Debris get deposited into the water, including fire retardants, which have been found to have adverse health effects. Infrastructure gets melted and burned trees block water flow. A lot of catastrophic failures can happen in the water delivery system. I’ve been a block captain in the Neighborhood Response Group for a few years now. We actually drill twice a year and come up with contingency plans in case of a natural disaster. I think we need to talk about redundancy and spend some time gaming out what we would do in the event of a major fire, and that plan needs to be revisited once or twice a year (which needs to be made mandatory) just to make sure we can coordinate with the county response plan. In addition, I asked about whether the district currently had a way to “gate” certain areas to limit contamination. There seems to be some low hanging fruit as one examines the watershed that contains many small tributaries. I would want to consider a way to automatically block those off in the event of a fire to limit contamination, much like the idea of shutting the water off to your house after an earthquake so you can use the water in your water heater tank as an uncontaminated source until water quality can be assured.

I’d like to provide some clarity regarding my proposals because the race for MMWD board seats is being portrayed as a black-and-white choice between conservation, which is the low-cost solution, and building infrastructure to increase supply, which is the high-cost solution. As usual, the answer is far more complicated. Building new infrastructure is completely possible and will ultimately be where Marin HAS to go because of the movement of climate change and the increase in population over time.  The “brass ring” of water management, according to MMWD’s General Manager, Ben Horenstein, has always been recycled water, which today goes by the industry buzz acronyms IPR (Indirect Potable Recycled [water]) and DPR (Direct Potable Recycled [Water]). And on October 1, 2024, the regulations issued by the CA Office of Administrative Law came online:

https://www.waterboards.ca.gov/drinking_water/certlic/drinkingwater/direct_potable_reuse.html

AND they’re offering money to implement it.

https://www.waterboards.ca.gov/water_issues/programs/grants_loans/water_recycling/

Also, note that the infrastructure for DPR can be built incrementally. You can build a recycling capacity that replaces 1/3 of your yearly use, and voila! You can go 3 years without rain instead of 2, and so on.  Simple math; much more goes into the equations as to what capacity you should do when (depends on engineering tradeoffs which always include costs), but I hope you see my point.

Regarding whether new infrastructure is a necessity, note that if we’re in a drought, our suppliers, who currently supply about 25% of our water, are probably also in drought, and they have no legal obligation to sell us their water. The contracts only put a limit on how much we can buy. I asked the General Manager, Mr. Horenstein, this question, point blank. That makes us very vulnerable. So, then Mr. Horenstein brought up equity issues for DPR and pumping costs for IPR. That’s when I started talking about a “water battery” and getting together with MCE to reduce costs and increase revenue. I thought, surely there’s a pipe turbine. I couldn’t believe we’re leaving energy on the table with any pressure-reducing valves and lo and behold it turns out that East Bay Municipal District is ahead of us with a pilot program that we can learn from:

EBMUD pilot program generates clean energy from water pressure in its water pipelines :: East Bay Municipal Utility District

 

I hope this demonstrates the value of asking different questions. Some approaches may not be feasible, we have to do the math, but Mr. Russell seems reluctant to change, and the rest of the board apparently doesn’t read the same magazines I do. If there’s anything about my proposals that you don’t understand, I would be happy to answer any questions.

Furthermore, I’d like to point out that the question about expansion or conservation is not just one or the other. Did you watch the MMWD presentation on their conservation program? It has delivered pretty low water savings, so I would like to make sure it’s a good return on investment. But affluent people will only tolerate so much pain in conservation. And a lot of lower-income people have no control over water use as there is often only one meter on a multi-family building and I’m sure the landlord doesn’t share any rebates with them, so only the most ecologically minded will go to much effort. Conservation is a classic case of diminishing returns: you have to keep doing more and more to get less and less. We’ve been doing it since the 1950s, and most people let their lawns go during the last drought. I just don’t want to see all those dead trees in the park again. It isn’t exactly free to kill trees in public parks. They have to be removed for safety and that ain’t cheap.

Anyway, I’m not saying don’t conserve, I’m just saying we need to start building our recycling infrastructure, and we can do it all at once or piecemeal, but it seems a waste not to take advantage of our natural topography and get some green energy out of it too. Lots of tasty special bonds and grants for those projects. Marin should get some while they last.

 

P.S. I’m actually a little dubious of the equity issues in water quality brought up by the GM because of an article I read just today, which says the water is so clean that it’s actually an industrial commodity but I would have to do more research:

 

Transforming Wastewater into Clean Water for Hydrogen Production – ASME

 

Reading through the last audit, this line is one I think is a problem in ALL government budgeting:

The budget is balanced when operating revenues are equal to or greater than operating expenditures, including debt service but excluding depreciation and amortization.


I know this is standard accounting BUT infrastructure replacement should not be dumped in the same bucket as capital expenses. There is a HUGE difference, and this is why we got so screwed by previous water boards. We should be tracking and accounting for the expected design life of infrastructure. A pipe, a pump, or a dam has an expected design life. It’s replacement (even if it’s in 40 years) should be put in operating expenditures, not capital projects. This allows maintenance to be deferred when there is a deficit but everything “looks OK.” The budget is balanced. And this is a creeping problem. The only reason we don’t see more issues these days is because of the relative youth of our infrastructure and the safety factors built into old designs. Newer designs are a lot leaner in terms of their safety factors. That’s how manufacturers improve profit margins over time; they reduce safety factors until they start having premature failures. It’s classic engineering design trade-offs in a maturing industry. How many products have you owned that needed a replacement right around the time the warranty went out? Why did your grandmother’s washer last 20 years, and yours started making weird noises around the 8-year mark…sooner if you have teenage boys. Now, if at the time of replacement, you want to upgrade the system to a more modern, higher throughput, higher featured design (greener, cleaner water, etc.), that’s when it’s a capital project. Obviously, this is something that is a BIG deal to me and will definitely affect annual revenue growth targets in the future because it will be a big transition in accounting and will have to be done over time. It will also be a hard sell because it shows the reality of the situation and makes the current budget look less awesome, but it reflects the reality, and when we’re talking about something like water, we NEED to know the reality.

I find some lack of logic and fairness in the current rate structure. To me, rationing would mean every human (child/adult) gets an equal ration of water. If we can’t use state income tax data with the assignment of primary residence to do this, then some model that approximates this value should be used.  Right now, the structure is based on the reality of usage. People in higher-density housing use less water so their tiers are set lower. How is that fair? People in single-family housing are, in general, more affluent than people in multi-family housing, but the people in multi-family housing are paying more per gallon.

When it comes to the rates of such things as golf courses (and I have to admit I feel the same way about golf courses as Malcolm Gladwell…despite my Scottish heritage, I don’t toss progressively larger rocks or giant cabers either:) I don’t think future rates should be based on past usage because that kind of system penalizes the good actors. I think an empirical assessment of the property is the way to go, and that is the direction the current board was going at the meeting I attended. A similar system should be used for businesses. I know some businesses are big water users, and some are smaller by their nature, but shouldn’t this reality be evident in the price of the product unless it’s a product we as a society want to promote, like fresh fruits and vegetables? Even there, though, there must be guard rails for abuses. We have to asses such businesses on an empirical basis and do allocations thus. Golf courses seem to fall under the umbrella of businesses/organizations we want to discourage, otherwise we would treat them like all other businesses. I think we need to be honest about intent. These empirical assessments should be revisited on a legislated schedule to account for new technology, norms, and ground conditions. For instance, in a best-case scenario, if the supply of water increases, shouldn’t Tier 1 be increased (overall water rates would have to be adjusted to accommodate this “discount,” but that’s just algebra and the long-term model of the new supply and demand would settle over time)? This is not my area of expertise; these are just questions that I would pose and require to be answered. Many times, there are really good arguments for current models, and I need to weigh those. But I’m pretty solid on the residential tiers. It’s especially insidious because you have to go spelunking through the website to discover there is a differential that actually favors the more affluent residents, it’s not evident on your bill there is a differential.

First, I want to emphasize that I have NO skin in this game; nature and I are not close.  I appreciate it from a distance. I’m allergic to some plant that my allergist and I have never been able to pinpoint.  It makes me feel like someone threw me into a sack of fleas, and I’m the only person I’ve ever known who got sun poisoning in Muir Woods (I am seriously not kidding). But I took some time to think about this and investigate the pilot program for mountain bikes and e-bikes that was just implemented after what sounded like years of work and lots of dollars. Yet despite that, every hiker of the watershed (some of them mountain bikers themselves) and ratepayer I’ve queried seemed to know nothing of it, which really disturbed me. For instance, I don’t understand why signs weren’t posted on the proposed pilot program trails with QR codes inviting current users’ opinions on the new recreation plan or, at the very least, in the parking lots. I also think this should have been addressed to every ratepayer in a snail mail, as the primary mission of MMWD is a clean, resilient water supply, not recreation; it’s at the beginning of every long-term plan. The increased enforcement and maintenance costs will be borne entirely by the ratepayers. Is that something ratepayers want to pay for? Do they want to invite more traffic around their water supply? MMWD seems to have an enforcement problem now. One of the council members commented during the meeting how he went out there to walk the trails and noticed all the bagged dog poop littering the pathways. Several people commented during the same meeting that there was a lot of illegal biking now. It seems to me the current enforcement problems should be addressed before inviting a huge number of additional recreational users to the watershed. I think the ratepayers might be quite happy to sponsor and support greater recreational use, and my position is they should be involved because they’re paying for it. I also think it’s important not to disenfranchise the current recreational users, and by not working harder to communicate the project so that they have time to have their say at the beginning of the study, it’s a sure recipe for a lot of unhappy people and a less successful pilot. So, in conclusion, if you can sell it to the ratepayers, I’m with you, but all expenses associated with recreational expansion should be made clear.

I’m sorry I’m hurting from the rate increases as well.  I assume you know about all of MMWD’s programs:

 

https://www.marinwater.org/sites/default/files/2021-09/Low%20Income%20-%20JUL2021.pdf

Discount Programs | Marin Water

 

A large portion of the water board was replaced in the last several years and given a mandate to make sure we do NOT run out of water. New board members got very ambitious. IMHO I think they could have spread the pain out over a longer period of time. We didn’t need to level up with some of the most expensive districts in four years, maybe not ever, it depends on the specific capital projects they plan to do, but I don’t think that’s been completely decided yet, so I’m wondering why that specific amount over that specific time horizon was mandated in the Rate Report, I would have expected the Rate Report to offer some options to the board, instead, it’s a one option document. There’s no question MMWD has been undercharging us for years. I’ve collected our neighbors’ rates to show you what people are paying around us. In 2023, the district was operating in deficit and was minus 20-something employees and had (and still has) a boatload of deferred maintenance and replacement projects, but it did have a cash reserve, so it wasn’t a worst-case scenario (thank goodness). We had to raise rates imminently, so we weren’t deficit spending and to cover deferred maintenance, but we have some wiggle room with capital projects for expansion and resiliency, and the report offers no options there. You can’t indefinitely postpone upkeep and replacement, and because that’s what past waterboards have done, we’re in much worse shape than we would have been had we been paying higher rates all along and keeping up with maintenance. When a neighborhood is built, the developer pays for all that infrastructure, but then they’re off the hook for its eventual maintenance and replacement. MMWD didn’t have to pay those initial capital costs, so they never put their eventual capital replacement costs in the budget (amortization of infrastructure). Government, in general, does this, and it drives me nuts. I hold my breath every time I go over the Richmond Bridge as it is decades past its design life and it’s given plenty of failure warnings. I did a whole series of paintings back in 2016 on this. I could talk about failure modes that could happen for hours.

 

The reason you can’t increase tiers 3 and 4 significantly is the same reason you can’t just tax the wealthy: there aren’t enough of them, and any variation in their usage, say during a drought, would totally kill your monthly cash flow. To give you an analogy, California has one of the most progressive tax systems in the country. We are much better at making the wealthy pay their fair share. The problem is that the income of the wealthy, because they don’t work for their money, their money works for them, is highly sensitive to the ups and downs of the market, and whenever we have a bear market, California tends to fall into deficit, but in good years, we usually have a significant surplus. It’s hard to run a government on such variable cash flow, especially when the constitution won’t let you keep more than 10% of the general fund revenues in a rainy-day fund. That’s why we must have regressive taxes like sales tax, people have to buy stuff whether we’re in feast or famine. Also, how fair is it that a family of 4 or 5 has the same tiers as a family of 2 living right next door to each other? If you raise tiers 3 and 4, yes, you hit the big users, but is it fair to make young families pay more than empty-nester retirees? We already kick them in the teeth with property taxes if they can figure out how to buy into the market, do we have to penalize them again?

 

The thing that I find most shocking and most unfair, is that people with pipes greater than 5/8″ (normal SFD size) pay SUBSTANTIALLY less because their price goes up closer to linearly instead of by the square. I can’t believe this is standard practice. Here is where your larger water users should be paying more, not with tiers (which should be proportional to use) but with actual service fees and capital fees which make up about 25% of my personal bill but if you are a really good conserver or live alone, it will be a greater percentage of your bill. Just to give you a rough idea of how out of whack this is, the service charge for a 5/8” pipe in 2024 is $48.04/month so a  2” pipe should have a service charge of $491.92/month but the actual charge is $222.45 all the way up to a 10” pipe which should be $12,298.09/month but is actually $6,989.78/month. The Capital Maintenance Fee and Watershed fee are similarly distorted. I don’t know how much of a difference this will make to the overall revenue; that would take me many, many more hours to calculate, but consider a golf course, a gym, a condo, or a carwash. MMWD is not charging you for the water for the most part; they’re charging you for the treatment and delivery, and those with a bigger delivery system should pay their mathematical load. The great thing about this line item is it is NOT affected by month-to-month variations in water use.

 

Finally, and I’m not saying this is right, it’s just reality, the use after a drought only slowly increases and doesn’t usually return to pre-drought use. That’s why the drought surcharge doesn’t go away. It’s a charge to compensate for less usage. And the previous board (and Mr. Russell) want to solve our water issues with conservation because it is usually the least expensive fix to supply issues, and I think I’ve explained pretty robustly in my other answers on my FAQ why I think that is not the solution for the long term.

 

If you skim this document at the bottom, you will see some excerpts from the Rate Plan Study MMWD commissioned in 2023 https://www.marinwater.org/2023RateSetting. They pretty much used that as a Bible, as far as I can tell, and I’m guessing the instructions given were something like, “We need to know how much rates need to be raised so we can do some major capital projects to increase water supply within the next four years.” Otherwise, why the four-year time horizon? I think if you take a look at those excerpts, you will see why I’m pushing potable recycled water so hard. The imported water is getting more expensive, AND it’s not guaranteed. The current board wants to spend some of that money to increase importing capacity. The state is offering grants for water districts that implement potable recycled water. It’s a drought-independent source, AND MMWD doesn’t have to pay for all of it…a win-win for ratepayers. I also think we might be able to incorporate pipe turbines to take advantage of the natural landscape and help with MMWD energy costs, which would again lower delivery costs for water and these kinds of projects also have many state and federal incentives.

 

I mentioned in another one of my FAQ questions about how amortization is not included in the part of the budget that needs to be balanced every year. That budgeting practice, which is how most budgets are done, I think is wrong, at least when it comes to public infrastructure.  We are paying for our predecessors’ lack of strategic planning (and it’s not like they didn’t have giant droughts in the past to scare them straight). They were heroes with impossibly low rates and a balanced budget. Now we’re suffering because it’s usually more expensive to fix something that has deferred maintenance, and it shortens its design life which also makes it more expensive. That’s where they left us, and that’s why we are feeling so much pain.

 

MMWD 1 unit = 100 ft3

Single Family Dwelling:

Tier 1: 0-15

Tier 2: 16-25

Tier 3: 26-80

Tier 4: 81 +

 

From the 2023 Rate Study commissioned by MMWD you can find it at https://www.marinwater.org/2023RateSetting :

 

Pg ES1-2 …The District currently maintains reserves but has faced increased financial pressures in recent years, particularly due to drought. On April 20, 2021, the District declared a water shortage emergency within its service area. The severity of the drought conditions required implementation of numerous water conservation measures, which resulted in reduced water consumption and decreased revenues.  These financial pressures were further exacerbated by the need for the District to import additional Sonoma Water to fill shortages in local water supplies from the District’s watershed.  Therefore, the District is facing a number of financial challenges that will require immediate and long-term rate increases. These challenges include:

  • Increased Wholesale Water Costs – Historically, the District has relied on imported water from Sonoma Water for approximately 25% its water supply. The recent drought caused the District to need to import additional water from Sonoma Water, which composed approximately 44% Executive Summary ES-1 Marin Municipal Water District Water Rate Study of its supply during FY 2022. Additionally, Sonoma Water’s wholesale rates are projected to increase by an average of 8.5% per year starting July 1, 2023.

 

  • Repair and Maintenance of an Aging Water System – The District takes a proactive approach to maintaining its water system which requires continuous repair and improvement projects. Accounting for construction cost inflation, the District anticipates funding approximately $245 million of capital improvement projects over the next 4 years, averaging $61 million per year. The proposed rates will allow the District to fund $165 million of capital on a pay-as-you-go basis and seek financing for the remaining $80 million.

 

  • Water Supply Projects – The District is actively pursuing water supply enhancement and reliability projects to mitigate the impact of future droughts on District customers. The proposed rate increases will be necessary to pay for the cost of design and environmental work for these projects and to support adequate debt service coverage capacity for future financing.

 

  • Ongoing Inflation – On top of rate increases needed for other purposes, annual rate increases are needed to keep revenues aligned with inflation and prevent rates from falling below the cost of providing service. In recent months, inflation has reached forty-year highs as reflected in the CPI, and the ENR CCI increasing over 7% in 2022.

 

 

Pg 12…Water sales revenues are based on the projected volume of water sales and projected water rates. In FY 21/22, water sales declined by 22% but are conservatively projected to gradually rebound from the low use due to the recent drought conditions and water shortage emergency in the District by 5% in FY 22/23 and 2% per year from FY 23/24 to FY 26/27.