Santa Fe Irrigation board to vote on water rate increases this month

This month the Santa Fe Irrigation District is preparing to increase water rate charges for the next three years. The rate structure approved by the board in late 2022 was for tiered rates with a meter overlay for residential properties, an option they believe is unique to accommodate the variations in the district from small Solana Beach city lots to larger properties in Rancho Santa Fe.

The public is invited to attend the public hearing on March 28 at 8:30 a.m. at the district offices. In accordance with Prop 218, notices about the proposed rate structure were sent out in February giving customers an opportunity to protest the rate increases up until the March 28 hearing. If the district receives protest forms from a majority of its 6,500 customers, the rate plan will not go forward

If approved, the new rates would go into effect on April 1 and impact bimonthly bills in June.

Seth Gates, SFID administrative services manager, said the district’s goal is to be as informative and transparent about the rate increases as possible. District staff has been making public presentations on the proposal including at the Solana Beach City Council and the monthly Rancho Santa Fe Association board meeting. A meeting will also be held on Thursday, March 9 at 11 a.m. at the La Colonia Community Center in Solana Beach.

Rate calculators on their website allow customers to see what the individual impact of the new rates will be.

According to Gates, the water rate increases are being driven by drought conditions, the loss of local water supply due to the damages at Lake Hodges, the increasing cost of imported water and inflationary pressures on district operations.

Due to the loss of local water, the district is relying more on imported water. Imported water from the San Diego County Water Authority (SDCWA) has increased an average of 5.7% a year since 2010.

The district currently charges customers the 2020 prices but is paying 2023 prices due to one-time benefits returned to customers, Gates said. Those funds have run out and the 17.9% increase in rates now must be passed onto customers; the district is about $400,000 a month below where they need to be in terms of revenue recovery.

District operations have only increased 3.6% a year over the last 10 years: “We are committed to ratepayers…we are not just spending blindly,” Gates said.

Gates said the district has found $3 million in savings from pension and retiree health care reform and energy management improvement across district facilities. They have proposed a 3% increase in maintenance and operations for 2023 and a 5.5% increase for 2024, which will be reviewed in November for possible reduction.

“Lake Hodges is a big issue,” Gates said.

Thirty-one percent of SFID’s water comes from Lake Hodges and their average yield provided a $2.5 million benefit to SFID customers. Losing the ability to yield local water has a huge impact on customers, requiring the district to purchase more expensive water from the SDCWA.

Emergency repairs of the 105-year old dam began last year after the city found leaks and cracks during an inspection. The initial schedule had the repairs being completed and reservoir refilled by October 2023 but in the fall, a significant new hole was discovered. The Division of Safety of Dams (DSOD) has now placed a restriction on the reservoir water level to avoid putting pressure on the defects.

With the adjusted timeline, the repair work is now expected to continue into the spring. The city is working with DSOD to explore options for rehabilitation or potential replacement of the dam—a lengthy and expensive process, a new dam would be about 10-15 years away.

“The loss of local water impacts all customers but has the greatest impact on customers who use less water,” Gates said.

To provide some relief for the rate increases, the SFID board has recommended actions such as utilizing $2.5 million in rate stabilization reserves and the redistribution of property tax revenues to offset costs for single family customers in tier one. They also plan to continue to work with the city on ways to potentially restore local water.

The district’s cost of service process began in January 2022 and the board held eight special workshops throughout the year to discuss its rate structure options.

The current five-tiered rate structure will go down to four tiers with a meter overlay.

About 87% of customers are on a 3/4 meter, it is the most typical meter size, Gates said.

Currently SFID rates are the cheapest in the county. Rates for an average 3/4 inch meter using 45 units of water (a unit is 748 gallons) will raise from $255 to $325 bimonthly. This increase will still put SFID below the average of $345 countywide—the city of San Diego’s cost is $418.

For a larger one inch meter (which many Rancho Santa Fe properties have), the impact isn’t felt as heavily. The average rates for a one inch meter with 142-unit usage will go from from $826 to $888 bimonthly. The county average for a one inch meter with that usage is $1,060 and the city of San Diego’s is the highest at $1,648.

Customers can compare their bills with real usage data on the website to see what their new bills will look like if the rates are approved this month. To check out the rate calculator and find more information on the proposed rate increases, visit sfidwater.org/277/2023-Water-Rates-Proposal