Your Novato Water Bill, Explained

North Marin Water District's rate program was approved at a public hearing on June 18, 2024 and covered three years: July 2024, July 2025, and July 2026. All three increases have taken effect. The program is complete, and any further increase requires a new study and a new Proposition 218 process.

Over those three years the District did not just raise rates. It restructured them. Where the money moved tells the story.

Before July 2024, a heavy residential water user and a summer commercial irrigator paid exactly the same price: $9.44 per thousand gallons. Today the homeowner pays $15.22 and the commercial account pays $8.60. Same starting point. The homeowner's rate rose 61%. The commercial rate fell 9%.

That divergence did not happen by accident. It is the result of choices the Board made about fixed charges, tier design, and a pass-through mechanism that shifts wholesale costs onto the customers least able to avoid them.

How your bill works

Three components.

A fixed charge. Paid regardless of usage. For a standard 5/8-inch meter it is $65.60 every two months, about $33 a month before you use a drop. It covers debt service, billing, meter reading, and service-line maintenance. Bills arrive every two months, and the fixed charge is prorated daily across the actual days in your billing period.

Three tiers, each tied to a real water source. Tier 1 covers the first 262 gallons per day at $8.04 per thousand gallons and pays for imported Sonoma Water, the cheapest supply and about 80% of Novato's water. Tier 2 covers the next 458 gallons per day at $10.29 and pays for treating local water at the Stafford Treatment Plant. Tier 3 covers usage above 720 gallons per day at $15.22 and pays for Stafford treatment plus the entire conservation program. Allocations are per dwelling unit, not per person. A family of five and a single occupant each get 262 gallons in Tier 1.

An elevation zone charge, added on top. Pumping uphill costs money, so the District adds a flat per-gallon charge based on elevation: Zone A (0–60 feet) adds nothing, Zone B (60–200 feet) adds $1.03 per thousand gallons, and Zone C (above 200 feet) adds $2.85. The same amount is added in every tier, so it does not scale with usage. Your bill does not show the zone charge as a separate line. It is folded into the rate. A Zone C household pays roughly $157 to $939 more per year than a Zone A household using identical water, a cost most homebuyers never see disclosed.

The District's own bill-impact analysis

The most useful table in the public record comes straight from the District's April 2, 2024 presentation to its Board. It shows the first-year impact on single-family homes with a 5/8-inch meter, 70% of all accounts. A low-use household at 74 gallons per day saw its bill rise 10.4%. The median household at 148 gallons per day saw an 8.5% increase. A high-use household at 443 gallons per day saw an 11.5% increase. The impact was U-shaped, and the median household did best.

Low users took a larger increase than typical users because the fixed service charge rose 14.5%, well above the 8.5% overall revenue increase, and the fixed charge is the dominant share of a small bill. High users took the largest increase because the tier rates above them were rebuilt. That U-shape is the single most important fact about this restructuring, and it is the District's own arithmetic, not an outside estimate.

And the same slide deck, for commercial accounts, shows every commercial meter 1 inch and larger saw its summer bill fall, and the annual increase shrank steadily as accounts got larger. The largest commercial accounts received the smallest increase of any customer group in the study. A low-use household with a 5/8-inch meter saw +10.4%. A large commercial account with a 3-inch meter saw +5.4%. The District's presentation showed both of these numbers to the Board on April 2, 2024. Neither is disputed. They simply were never placed next to each other.

Fixed versus variable: the pressure that isn't finished

The District told its Board that 69% of its costs are fixed but only 31% of its revenue was, and proposed moving fixed revenue to 34%. That gap is the engine behind the 28.6% fixed-charge increase, and it has not closed. There is a standing rationale for pushing the fixed share higher still.

Every step in that direction falls hardest on low-use households, because a fixed charge is the same dollar amount whether you use 70 gallons a day or 700. It is also the portion of the bill that conservation cannot touch. For recycled water customers the shift was far more aggressive. Fixed revenue went from 9% to 19%, with service charges rising 47% to 134% depending on meter size, even as the recycled usage rate fell 9%.

The pass-through: a modest counter-tilt

Under California Government Code Section 53756, the District adopted a pass-through provision for fiscal years 2025-26 and 2026-27. It lets the District recalculate rates when Sonoma Water raises wholesale prices, and such future rate adjustments do not require additional public hearings or any additional action by the District. Customers get 30 days' notice, and that is it.

About 40% of the Tier 1 rate is fixed by NMWD and about 60% is passed through at cost from Sonoma Water. The formula reproduces the published rates exactly. Back-solving shows Tier 1 rose from $7.01 to $7.44 in July 2025, implying a 6.2% Sonoma increase, and from $7.44 to $8.04 in July 2026, implying a 9.4% increase. The District's own illustrative example in the April 2024 presentation assumed a 12% Sonoma increase, which would have driven Tier 1 up 9.64% in a single year. Actual increases came in well below that.

The pass-through touches Tier 1 and commercial rates only. Tiers 2 and 3 are funded by local Stafford Lake treatment costs and are insulated from wholesale volatility. So your exposure depends on how much of your bill sits in Tier 1. A household at the Tier 1 ceiling has about 40% of its bill riding on Sonoma's decisions. A heavy irrigator at 2,000 gallons a day has under 5%. Over the two pass-through years Tier 1 rose 14.7% while Tiers 2 and 3 rose 12.3%, a gap of 2.4 percentage points. At the bill level the spread was about 1.1 points.

The pass-through is real and does shift burden toward lighter users, but it is a modest counterweight, not the main event. The stronger version of the concern is forward-looking. The mechanism has no cap, and it removes the Proposition 218 protest process from the tier where roughly 80% of residential water sits.

Where the fairness question really sits

Commercial, institutional, and irrigation accounts pay a single uniform rate of $8.60 per thousand gallons, with no tiers. The District's stated basis is that the uniform rate equals the weighted average rate paid by residential customers across all three tiers, satisfying Proposition 218. It replaced a seasonal structure on the reasoning that Stafford Lake now operates in many months besides summer.

The old summer commercial rate was $9.44, identical to the old residential Tier 3 rate. The restructuring sent them in opposite directions. Residential Tier 3 rose 61.2% to $15.22. Commercial summer fell 8.9% to $8.60. A heavy residential user's marginal rate is now 77% above the commercial rate. Below about 349 gallons a day a household pays less per gallon than a business would, and conserving households genuinely benefit from the tier system. Above that line the advantage flips and grows without limit.

Help exists, and almost nobody is using it

The District runs a Low-Income Rate Assistance program worth $30 per bi-monthly bill, or $180 a year. For the low-use household in the District's own table, that is roughly a 28% cut in the water bill, and it covers about 46% of the annual fixed service charge. Eligibility is unusually simple. You must be enrolled in PG&E's CARE program. If you already are, that is essentially the whole test.

Enrollment was 371 customers as of the 2024 study, out of 20,882 potable connections. That is 1.8%. The total cost to the District is about $66,780 a year, roughly a quarter of one percent of revenue. The District doubled the credit from $15 to $30 in July 2024, which is real and worth crediting. But it doubled the size of a benefit that fewer than two in a hundred customers receive. The gap between CARE enrollment in Novato and LIRA enrollment is the number nobody has published, and it is almost certainly the cheapest available fix to the regressivity described above.

What happens next

Both the three-year rate program and the two-year pass-through authorization have run their course. Any further increase requires a new rate study and a new Proposition 218 process, including a mailed notice at least 45 days before a public hearing and a tally of written protests. The District's own long-range forecast already projects 3% annual increases from FY2029 onward, and shows the debt coverage ratio climbing from 1.48 to 2.13 by FY2028 and to 5.87 by FY2034, far above typical lender requirements of around 1.25.

This is the window in which public input carries weight. This is the first rate cycle a director seated in December 2026 will vote on, and the first chance to put a hard dollar cap and a true-up on the pass-through.

Questions worth asking

Why did the lowest-use households take a bigger increase than median households? The District's own analysis shows +10.4% for low users versus +8.5% for the median. The driver was a 14.5% fixed-charge increase against an 8.5% revenue increase. Was that distributional outcome intentional?

Why did commercial irrigation get a rate cut while residential Tier 3 rose 61%? Both started at $9.44. Eliminating the summer commercial premium removed the only price signal aimed at commercial landscape watering. What cost-of-service analysis supports treating those two uses so differently?

Why is LIRA enrollment only 1.8% of connections? 371 of 20,882. The program costs about $66,780 a year. What outreach has been done, and could the District enroll CARE participants automatically through a data-sharing agreement with PG&E?

Should the next pass-through have a cap or a sunset? It performed well at 6% and 9% wholesale increases. At the 12% the District used in its own example, it would have shifted burden toward Tier 1 households considerably harder, with no hearing and no protest opportunity.

Is the Zone C premium disclosed to homebuyers? A hillside household pays up to roughly $939 more per year for identical water.

Your water bill should never change by an amount nobody printed for you in advance. North Marin's own rate study assumes Sonoma Water's price never goes up again, then passes every increase straight to Novato with no ceiling, no dollar figure, and no annual accounting of what the District actually paid. That authority expires in June 2027 and the District has to write a new notice from scratch. The next notice should state a hard maximum in dollars for every year it covers, include any drought surcharge the District might ever impose, and publish each year what it paid Sonoma Water against what it collected from you.