Water Rates Background
WATER RATES BACKGROUND & OVERVIEW
The City currently purchases approximately 90% of our necessary water supply from the State Water Project. The other 10% comes from the City Vallejo and/or the City of Napa. During the recent drought, the State Water Project was unable to provide enough water for our residents and business users, which meant the City had to purchase water on the open market. This severely impacted our City’s Water Fund. With the implementation of the drought surcharge, the City was able to maintain the current level of service.
The Water Division is currently working to decrease leaks and increase the reliability of our water sources in order to provide for our residents and businesses in the future. This requires significant capital improvement and participation in the Sites Reservoir Project for additional water supply reliability. This, along with community conservation has sustained the City thus far; however, this is not a long-term solution.
The City of American Canyon’s Water Division is an enterprise fund. The fund cannot show a profit, but it does need to maintain a reserve fund. The expenditures for operating capital (which includes the costs to buy, treat, and distribute the water) and debt service (paying back of prior loans) are covered by rates and fees paid by the customers. The primary factors which impact our water rates include the cost of water, the cost of daily operations, and the capital improvements necessary to repair aging infrastructure. Although the City may be only 25 years young, American Canyon’s water infrastructure is up to 60-years-old in some neighborhoods.