By Joe Tash
Santa Fe Irrigation District directors agreed to cut more than $800,000 in expenses from next year’s budget during a special workshop session held on Monday, April 25.
The cuts include trimming $520,000 from the water district’s operating budget, and a decision by the board not to make a $311,000 payment into a trust fund for future retiree health benefits, from the spending plan for the fiscal year that begins July 1. The current year’s operating budget, including debt service, is $22.8 million.
During the workshop, directors provided guidance to staff as they prepare next year’s budget. Among the questions the board considered was how much the San Diego County Water Authority — the district’s supplier of imported water — will increase its water rates next year, and how much local water from Lake Hodges will be available.
The district has been told by the water authority that the cost of imported water will rise between 9.5 and 17.8 percent next year, but a firm number won’t be available for about a month. In the meantime, directors told staff to build a 14 percent increase into next year’s budget.
Directors also told staff to plan for meeting about half of the district’s water needs with local water from Lake Hodges, which is full from this winter’s above-average rainfall. The district expects to need 10,750-acre-feet of water to serve its customers this year, a number that has been declining in recent years due to conservation efforts, rising water prices and other factors. (An acre-foot is about 325,000 gallons of water.)
Factors such as budget cuts, increases in the cost of imported water and availability of less-expensive local water will all figure in when the board sets 2012 rates for water district customers. In December, the board raised water rates by 12 percent for 2011, and also approved increases of up to 12 percent for each of the next two years.
At the time, the district cited the increasing costs of imported water as a key reason for the increase.
A final decision on next year’s rates will be made in November, at a time when the district knows for certain how much the water authority’s rates will rise, said General Manager Michael Bardin.
The board’s decision on next year’s rates will also affect how much money is available for capital improvements, such as replacing aging water pipes and other equipment. For the coming budget year, the district plans to carry over $7 million worth of projects from this year, as well as undertake $5.5 million in new projects.
Some board members said they are concerned the district is not setting aside enough money to pay for replacing worn-out infrastructure.
“We’ve got a lot of 50-year-old pipe in the ground,” said director Robert “Bud” Irvin, who participated in the meeting by phone because he was out of state.
Director Ken Dunford said he also believes the district is underfunding its capital improvement program. “If we’re going to maintain this system we’ve got to step up to the plate,” he said.