The Santa Fe Irrigation District board approved a 4 percent rate increase, which will take effect on Jan. 1, at its meeting on Thursday, Nov. 16.
The 3-1 decision, with director David Petree casting the lone "no" vote, will require the district to scale back its 10-year capital improvement plan by 25 percent, to $45 million from $60 million, said district spokeswoman Jessica Parks.
Director Andy Menshek, who was seated on the board Thursday to fill the remainder of the term of former director Augie Daddi, who stepped down Nov. 1 for personal reasons, abstained from voting on the rate increase, said Parks.
The board opted to decrease the rate increase from the 9 percent hike recommended by district staff, which would have fully funded the list of capital projects.
The 4 percent increase follows two recent 9 percent rate hikes, in June 2016 and January 2017. In addition, Santa Fe customers will see about a 2 percent increase on their bills in January, a "pass-through" of rate increases from the district's wholesale water suppliers.
A cost-of-service study completed in 2016 recommended three annual 9 percent rate increases in order to fund district operations, including capital projects such as maintaining and replacing the district's pipelines and other infrastructure. A new cost-of-service study will begin in 2018, which could result in recommendations for rate increases for 2019 and beyond.
About a dozen people attended Thursday's hearing, half of whom spoke, urging the board not to raise rates in January, Parks said.
At a board meeting in October, some directors indicated they would have difficulty supporting a 9 percent increase for 2018.
A district staff report prepared for Thursday's meeting showed that customers who use 150 units of water - near to the district average of 120 units - will see their bi-monthly water bills rise to $854.70 on Jan. 1, up from the current $809.01, under the 4 percent increase approved by the board. The new bills also reflect the pass-through charge.
According to the staff report, the water bill for customers using 150 units every two months will rank in the bottom one-third of the county's 23 water agencies. The highest rates for customers in that category are charged by the city of San Diego, and the lowest are charged by the Fallbrook Public Utility District, according to the staff report.
The Santa Fe district provides water to residents of Rancho Santa Fe, Solana Beach and Fairbanks Ranch.