Water board members balk at proposed 9 percent rate hike

Directors with the Santa Fe Irrigation District are mulling whether to impose a 9 percent rate increase on their customers in 2018, on the heels of 9 percent increases levied in 2016 and 2017.

The proposed increase for 2018 is part of a three-year rate plan approved by the board in 2016.

However, the board was urged at its meeting on Thursday, Oct. 19, to hold off on the third installment of the rate plan, and instead consider changing the way it calculates rates for the largest water users, many of whom live in Rancho Santa Fe. (The district also serves Solana Beach and Fairbanks Ranch.)

The request came from Bob Hall, manager of the Rancho Santa Fe Association, and Greg Gruzdowich, a former water board member who now sits on the Association’s water committee.

Hall said Association members feel the current rate structure is unfair, because customers are charged an increasing rate as their water use goes up. That has resulted in some Ranch residents seeing a 45 percent increase in their water bills, Hall said.

The Association wants the board to adopt a uniform rate for all customers, Hall said.

The plea to hold off on the proposed 9 percent rate hike on Jan. 1, which was recommended by district staff, resonated with some board members, who are concerned at the size of the proposed increase.

“I would find that incredibly difficult to do,” said Director David Petree, of having to explain to his constituents that the board is raising rates by an additional 9 percent in 2018.

“Nine percent is really hard for me, too,” said board President Michael Hogan.

Board member Ken Dunford said he hasn’t decided yet if he will support the 9 percent increase, but he wants to make sure the district makes the needed investments to maintain its infrastructure.

Directors Augie Daddi and Marlene King were absent from the meeting.

“No one likes the rates to go up,” conceded General Manager Michael Bardin. But he and other staff members told the board that some projects on its list of planned capital improvements might have to be pushed back if the board decided on a smaller rate increase.

Petree said most businesses have to prioritize their capital improvement projects based on the amount of money they have to spend. And he said the district should do the same.

“We have to pick our priorities. There’s a limit to what we can ask our ratepayers to pay every year,” Petree said.

The district is legally required to give its customers 30 days notice before rates go up. Therefore, if the board does not approve the Jan. 1 rate increase by its meeting on Nov. 16, allowing notification to go out by Dec. 1, implementation would have to be pushed back to February or March, said district spokeswoman Jessica Parks.

Although Petree expressed reservations about the proposed 9 percent increase, he said he would support a “reasonable” increase, even if it meant some capital projects had to be delayed.

“I don’t think 0 percent (for a rate increase) is realistic and I would never vote for that,” he said.

In addition to any rate increase adopted by the Santa Fe board, district customers will also see a 2 percent “pass through” increase on their bills in 2018 based on price increases imposed by the San Diego County Water Authority, the district’s wholesale water supplier, officials said.

Under the district’s current rate structure, water rates are set up in “tiers,” meaning that all customers are charged a smaller rate for the first 15 units of water they use. Those who use larger amounts of water pay a higher rate for the upper tiers set out by the rate structure.

Although the current proposal is for a 9 percent overall increase in rates, the percentage increase charged to specific customers will vary based on the amount of water they use and other factors, such as the size of their water meter.

A chart included in the board agenda packet for Thursday’s meeting showed that, under the proposed 9 percent rate increase, customers at the lowest level of use, at or below 15 units, would see an 8.1 percent increase in their bi-monthly bill.

Customers who use 150 units, slightly about the district household average of 120 units, would see a 10.7 percent increase (to $895.87) in their bi-monthly bill, while a household at the higher end, or 1,000 units, would see its bi-monthly bill rise 11 percent, to $6,855.92.

The board will further discuss rates for next year at its meeting on Nov. 16.