Monte Vista Water District meets approximately 50 to 75% of its customers' annual water demand with local groundwater supplies. The remaining 25 to 50% is imported from the State Water Project, originating from northern California. The reliability of this imported supply source has diminished greatly due to severe drought conditions and environmental and regulatory restraints affecting the entire state of California. As a result, the cost of obtaining imported water supply has increased greatly.
Additionally, prudent utility management requires the District to maintain adequate reserves in order to fund facility replacement needs, as well as to accommodate natural disasters, spikes in energy costs, and reduced revenue due to droughts. Portions of the District's infrastructure are over 50 years old and are undersized for adequate water service and fire protection. Material and energy costs also increase over time, requiring periodic adjustment of rates.
Finally, water conservation legislation passed by the California Legislature and signed by the Governor in 2009 requires the District to meet specific water use reduction targets by 2020. District customers have been successful in meeting these required reductions in water use, and we expect a long-term change in our customers' water use habits which will impact District revenues.