Directors of the Carmichael Water District, which aimed to raise rates 18 percent to offset falling revenues from reduced consumption, have decided to rethink the plan, General Manager Steve Nugent said Wednesday.

At a district board meeting Monday night that drew about 80 water users, customers delivered a clear message, Nugent said.

"The people were not happy with the rate increase," he said. "They wanted the district to go back and cut costs and to consider the financial state of people on fixed income. They weren't going to put up with that (increase), and I think the board clearly got that."

The board will spend time over the next month to "look at alternatives and (consider) what the public has asked," the general manager said. A decision is expected Jan. 23.

The district serves about 39,000 customers through 11,500 connections.

The district sought the increase because water use had fallen below its historical average by an astonishing 25 percent, thanks to a mild and wet weather year, foreclosed homes and ratepayers using less water because of rising water bills. That, in turn, pushed revenue sharply lower.

The 18 percent, had it passed, would have been on top of an even bigger rate increase previously imposed through mid-2014.

Before Monday's hearing, the district had called the need for a rate increase urgent.

The 18 percent increase was intended to generate an additional $1.5 million for the district over 18 months, starting in January.

In its October notice calling for the 18 percent increase, the district characterized its revenue shortfall as significant.

"The district's reserves have been depleted and we do not anticipate receiving enough revenue to cover operating expenses while continuing to meet the legally required debt service obligations for fiscal year 2011-12," the rate request warned water users.

The same notice further told customers the district had significantly reduced expenses. But some customers weren't buying it.

The district last year, for example, refinanced $28.5 million in bonded indebtedness to save $176,000 a year. One customer, in complaining to The Bee, cited a decision that came soon afterward in which directors authorized borrowing another $2 million to irrigate a golf course and replace an aging water line at Ancil Hoffman Park.

The state is requiring water suppliers to achieve a 20 percent reduction in urban per capita water use by 2020, a goal established in 2009.

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