1. Proposed MMWD Rate Restructure MCOE District Business Officials November 4, 2015

2. Marin Municipal Water District Special district Established in 1912 Elected board of directors Population served – 187,000 Watershed – 21,250 acres Service area – 147 square miles Ten towns & cites plus unincorporated areas – San Rafael, Fairfax, San Anselmo, Ross, Larkspur, Corte Madera, Mill Valley, Sausalito, Tiburon, Belvedere, County of Marin Alpine Lake

3. Water System Infrastructure 7 reservoirs 3 water treatment plants 900 miles pipe 125 storage tanks 95 pump stations 3 water supply sources – 73% Marin reservoirs – 25% Russian River water – 2% Recycled water 24/7 operations and reliability Bon Tempe Treatment Plant

4. Drought Situation January 17, 2014 Governor Brown declares drought emergency January 21, 2014 MMWD Board requests 25% voluntary reduction May 5, 2015 State Water Board adopts emergency water conservation regulation, including specific water savings targets MMWD’s target: 20% cumulative reduction in water use for June 2015 – February 2016 relative to 2013 June – 26%, July – 23%, August – 20%, September – 18%, October – 17% / Cumulative – 21%

5. Parameter Storage (acre-feet*)% Capacity% Normal Total79,566100%N/A Historical average for this date 52,75866.3%100% Current54,81268.9%103.9% This time last year49,57962.3%94% Current reservoir storage volume is 2,000 AF higher than average and 5,400 AF higher than last year. *One acre-foot (AF) is 325,851 gallons Current Storage Conditions

6. Water Sales Trending Down

7. Five-Year Capital Improvement Program Replacements Improvements Fire Flow Grants IT Watershed

8. Financial Impacts of Water Use Reductions Water sales decreased from FY 2014 to FY 2015 $7.6 million District responses – Reduced staff by 9% and implemented other cost controls – Use of Rate Stabilization Fund ($1.4 million in FY 2014/15 & $1.2 million in FY 2015/16) $5 million deficit in FY 2015/16 without rate restructuring Significant budget deficits in future without rate restructuring Current rates have been in place since May 2012

9. Operating Fund ($M) Actual FY 13-14 Actual FY 14-15 Estimated FY 15-16 Estimated FY 16-17 Water Sales & Charges$64.7$57.1$57.4 Other Revenues4.33.74.34.4 Total Operating Revenues69.060.861.761.8 Operating Expenditures(62.1)(62.3)(66.7)(69.0) Net Income before rate adj.6.9(1.5)(5.0)(7.2) Revenue from Proposed Rate Increase --$3.6$8.6 Revenue from 4% Rate Increase---$2.6 Use of Rate Stabilization Fund01.41.2(3.8) Net Income after rate adj.$6.9($0.1)($0.2)$0.2

10. Capital Fund ($M) Actual FY 13-14 Actual FY 14-15 Estimated FY 15-16 Estimated FY 16-17 Beginning Capital Reserve$56.6$47.3$30.3$7.1 Capital Revenue3.52.62.12.2 Debt Proceeds---20.0 Total Revenues60.149.932.429.3 Capital Projects and Expenditures (12.8)(19.6)(25.3)(25.5) Ending Capital Reserve$47.3$30.3$7.1$3.8

11. Based on cost of service analysis in compliance with Prop. 218 and district policy to improve revenue stability – Increase bi-monthly service charge * – Add new bi-monthly watershed management fee* – Adjust tier rates for all customer classes – Pass-through adjustments for water purchases – Drought surcharges for future droughts and other water use reduction emergencies (requires board approval prior to implementation) *Citizens Advisory Committee recommendations increasing fixed revenue Proposed Rate Restructure Elements

12. Proposed Bi-Monthly Service Charge $/Meter Size Meter SizeCurrent Proposed Jan. 1, 2016 Proposed May 1, 2016 5/8"$21.53$32.55$33.85 ¾"23.8141.2542.90 1"32.8858.6060.95 1.5"55.66101.95106.05 2"82.85154.00160.20 3"155.51318.85331.70 4"214.69561.75584.40 6"463.761,229.701,279.30 8"917.902,097.202,181.80 10"1,372.03,311.703,445.30

13. Proposed New Bi-Monthly Watershed Mgmt Fee $/Meter Size Meter SizeCurrent Proposed Jan. 1, 2016 Proposed May 1, 2016 5/8" $- $8.45$8.80 3/4" - 10.1510.55 1" - 13.4514.00 1.5" - 21.8022.65 2" - 31.8033.05 3" - 63.5066.00 4" - 110.15114.60 6" - 238.55248.10 8" - 405.30421.50 10" - 638.75664.30

14. Proposed Commercial, Irrigation, and Institutional Rates TierExisting (per CCF*) Proposed (per CCF) Effective 1/1/16 Effective 5/1/16 Tier 1$3.74 $3.65 $3.80 Tier 2$7.48$9.37$9.75 Tier 3$14.97$14.41$14.98 *One CCF, or hundred cubic feet, is 748 gallons For individualized analysis of rate impact on water bills, contact Customer Service at 415-945-1400.

15. Water Conservation Programs for Schools Irrigation Improvement Rebate – Up to $1500 per irrigation meter to upgrade irrigation system equipment (controllers, sprinklers, drip systems). – Need pre-rebate site inspection. Call 415-945-1527 Large Landscape Water-Use Survey – On-site survey to inspect water-using infrastructure – Detailed review of water use history and customized recommendations to reduce water use – Call 415-945-1523 Toilet & Urinal Rebates: $150 each, marinwater.org

16. Rate Restructure Impacts Achieve substantial revenue stability by increasing fixed charges from 17% to 28% Create a new, dedicated source of funding to manage and preserve the watershed Incorporate key recommendations of Citizens Advisory Committee Establish drought surcharges for future water reduction emergencies

17. Schedule DateAction Nov. 10 & Dec. 3 Conduct public workshops on proposed rates Dec. 8Conduct public hearing on proposed rates Jan. 1, 2016Initial rate changes effective May 1, 2016Additional 4% rate changes effective

18. Questions /comments? 220 Nellen Avenue Corte Madera, CA 94925 marinwater.org (415) 945-1455 Thank you.