What is a Budget Based Rate Structure?
IRWD’s Budget Based Rate Structure has two components: one is the Cost of Water and the other is the Service Charge.
Cost of Water: This is a consumption charge for the actual amount of water you use. The water used is measured in a per unit charge, a CCF. IRWD calculates the blended cost incurred to purchase locally produced ground water, and when necessary, more expensive imported water.
Service Charge: The total cost of delivering water to your home, maintaining the water distribution system (pipes, treatment plants, etc.), and the cost of doing business at IRWD.
How Does it Work?
Your water bill amount will vary depending on how much water you use. The more you use the more you pay. In our Budget Based Rate Structure, each customer receives a basic budget of water that provides a reasonable amount of water for your needs and property characteristics. For example, your budget takes into consideration the number of occupants in your home, the lot size, and the amount of irrigated landscape area, climate and other considerations. If you need more water than your budget provides, you can apply for a variance.
How Are the Basic Budgets Determined?
Our goal is to provide enough water for your needs. If you use more water than you have been budgeted, a higher water bill will send a strong pricing signal that you are using too much water. To set your budget, IRWD assumes certain minimum standard values for different types of accounts. Budgets can be increased if the need is greater than the basic standards.
Detached home – 4 residents / 1300 square feet of landscape
Attached home – 3 residents / 435 square feet of landscape
Apartment – 2 residents / no landscape
If there are more occupants or more landscape than these standards, you may request an increase in your water budget by asking for a variance. You may also have your budget increased if you have medical needs or operate a licensed care facility in your home.
Use Less. Pay Less
The best part about the Budget Based Rate Structure is that if you stay within your budget, you do get the lowest water rates in Orange County. IRWD customers have a history of being efficient with their water use. Customers have done an excellent job of implementing water saving devices and practices indoors. But did you know that 60 percent of the water used in the average home is for outdoor purposes? Landscapes consume more water than most people realize. Overwatering is often the cause of higher water bills. With smart, simple choices about plants, sprinklers and smart control timers, and using the right watering schedule for the time of year and weather, you can reduce your water bill and have a healthier landscape. To learn how to save water and money, please visit the “Saving Water” section of this website. We can help you save water and money.
IRWD Has the Lowest Rates
IRWD customers pay some of the lowest water rates in Orange County. Annually, the District compares our rates to those of neighboring water agencies. Each year these studies consistently show that IRWD's rates are among the lowest rates in the county when customers stay within their water budget.
The first 40 percent of a customer's budget is billed at the “Low Volume” tier. This tier is lower than our cost to deliver the water to you. This promotes using water efficiently. The next 60 percent of the customers’ budget is billed at the “Base Rate.” The base rate equals the cost to provide water to your home. The above-budget tiers are “Inefficient,” and “Wasteful.” The "Excessive" tier was eliminated on July 1, 2015. Billing in these higher tiers occurs when customers exceed their budgets. Over-budget charges can happen because of a leak or over-watering. It can also occur because the budget may need to be adjusted. Over-budget charges are used to fund conservation and education programs.
This Rate Structure is Fair and Equitable
To ensure equity among our customers, we separate the cost of building water and sewer infrastructure from the cost of daily operations and maintenance and capital projects. Capital projects are financed through general obligation bonds. These bonds are paid through a combination of property taxes and connection fees. The costs for daily operation and maintenance are funded through monthly user service charges.
The basic principle behind these precise cost allocations is that each end-user pays their fair share. No more, no less.
What Does IRWD do to Control Costs?
It’s a priority for IRWD to keep costs and rates as low as possible for all of our customers. IRWD has a proven history of sound financial management, fiscal responsibility and efficiency. We take our annual budget process seriously. We are committed to being strategic, responsible and transparent. Long-range water resource planning has allowed IRWD to develop a diverse water supply, ensuring reliability even when conditions change or systems fail. Long-range financial planning, similar to a family that regularly sets aside money for a child’s college education, allows IRWD to fund infrastructure replacement projects without dramatic increases in customer rates.
IRWD’s infrastructure replacement and funding model demonstrates the District’s commitment to financial stability. In fact, it protects our customers from rate instability. Our strong AAA bond rating is also reflection of being financially sound. Our strong bond rating allows us to build projects at a lower cost, allowing us to pass the savings on to our customers
What Are the Rates?
Rates vary by customer type and rate area. Please
click here to see current rates.
Why Are There Different Rate Areas?
As a result of consolidations with neighboring geographical areas, IRWD currently has two rate areas: Irvine and Los Alisos.
