Santa Fe Irrigation District customers in Solana Beach, Rancho Santa Fe face another rate hike

Customers of the Santa Fe Irrigation District, who saw their water bills go up by an average of 9 percent on June 1, face another rate hike of as much as 15.8 percent on Jan. 1, 2017.

At its meeting on Nov. 17, the board of directors of the district, which serves customers in Solana Beach, Rancho Santa Fe and Fairbanks Ranch, will consider the second installment of a three-year rate plan approved in May. That plan calls for three annual rate increases, averaging 9 percent per year.

The board also approved a "pass-through" provision, meaning that General Manager Mike Bardin is authorized to pass along to Santa Fe's customers cost increases from its suppliers, the Metropolitan Water District of Southern California, the San Diego County Water Authority and the San Elijo Joint Powers Authority.

According to a district staff report, Santa Fe's costs from those suppliers will rise by a total of 6.8 percent on Jan. 1, 2017.

Therefore, if the Santa Fe board approves the full 9 percent increase contained in its rate plan, as district staff recommends, plus the 6.8 percent pass-through, customers' bi-monthly bills will jump by an average of 15.8 percent on Jan. 1. Due to the way the district's bills are calculated, the specific increase faced by customers will vary by their classification, the amount of water they use and their meter size.

The Santa Fe board has split 3-2 on the rate increases, with directors Greg Gruzdowich and Marlene King voting against the measures. In May, the district received 1,324 written protests from customers about the proposed rate plan, short of the majority needed to block the increase, but setting a record.

That split may carry over to the Nov. 17 meeting, which will be Gruzdowich's last, since he opted to step down from his seat rather than seek a new four-year term.

"I'm definitely going to vote against it," Gruzdowich said of the proposed rate increase, "and hope that I can convince one board member to change their mind."

Gruzdowich has argued that the cost of service study was flawed, and that it is unfair to larger water users, because they are in effect subsidizing those who use less water. 

Santa Fe directors are elected by geographic divisions; Gruzdowich and King represent Rancho Santa Fe and Fairbanks Ranch, which have larger lots, while directors Augie Daddi, Michael Hogan and Alan Smerican represent Solana Beach, which has smaller parcels. Daddi, Hogan and Smerican, who is also stepping down from the board after the Nov. 17 meeting, supported the rate plan.

Hogan said he has not seen the staff report on the proposed 9 percent increase yet, but that if financial conditions have not changed since May, when the three-year rate plan was approved, he would support the second installment of the three planned increases.

"I would be inclined to support the increase per the plan, if the assumptions we made back in May are still holding true," Hogan said.

As for the cost of service study, Hogan said it was completed by a highly regarded consultant, and that the resulting rate plan is both "valid and legally defensible."

"There's a fundamental disagreement. He (Gruzdowich) is questioning some of the assumptions (in the consultant's study). That's his right. I don't agree with him," Hogan said.

In supporting the three-year rate plan, district staff said the rate increases were needed due to increased costs for buying and treating water, maintaining the district's pipes and pumping stations, building its reserves and developing alternative water sources.

If the board approves the full 9 percent increase on Nov. 17, as of the first of the year, a household that uses 120 units of water every two months (the district average) will see its bi-monthly bill increase to $582.29, from the current $542.46, according to figures provided by the district. That scenario is for customers with 3/4-inch meters. 

 At the top end of the spectrum, a household that uses 275 units of water every two months, and has a 1-1/2-inch meter, will see its bi-monthly bill rise to $1,624.48 from the current $1,493.59.

Those who use 14 units of water every two months will see their bill rise to $113.25 from the current $104.93.

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