In a proposed budget for the fiscal year that begins July 1, the Santa Fe Irrigation District expects an increase in water sales revenue of $4 million over the current year, according to report presented at the agency’s board meeting on Thursday, April 20.
The district attributes that increase to two factors - an 8 percent rise in customer demand for water, and a potential rate increase by the district of 9 percent, beginning on Jan. 1, 2018. The district also will pass along to customers an anticipated rate increase by its wholesale supplier, the San Diego County Water Authority.
A public hearing on the proposed budget is set for June 15. The district’s proposed operating budget for next year is $26 million, while its capital expenditure budget on equipment and construction is set at $2.84 million. The district supplies water to residents and businesses in Rancho Santa Fe, Fairbanks Ranch and Solana Beach.
The proposed 9 percent rate increase was approved last May as part of a three-year rate plan, and the district’s board of directors will revisit the 2018 increase - the second of three - this November before it takes effect. The board approved the three-year plan last year following a cost of service study, which analyzed the district’s revenue needs. The first of the three planned rate increases was enacted on June 1, 2016. The second took effect on Jan. 1, 2017, and the third is proposed for Jan. 1, 2018.
One big change expected next year, according to the budget report, is the availability of more local water from Lake Hodges, which is less expensive for the district. The district projected that it would have 800 acre-feet of local water available this year, and next year’s projection is quadrupled, to 3,268 acre-feet, due to record rainfall that filled Lake Hodges. The district has legal rights to a portion of the water that accumulates in Lake Hodges.
An acre- foot is equal to 326,000 gallons, and an average California household uses between one-half and a full acre-foot of water per year for both indoor and outdoor use, according to the nonprofit Water Education Foundation.
“We’re really excited to have local water this year, that will help us with our costs,” said district spokeswoman Jessica Parks.
The district’s report said the increased availability of local water will result in estimated savings of $634,000 next fiscal year. According to the report, about 36 percent of the district’s anticipated usage of 9,000 acre-feet will come from local supplies, while 64 percent will come from purchased, or imported, supplies. The district also expects to sell about 450 acre-feet of recycled water.
The abundant rainfall meant that for the month of March, nearly 100 percent of the district’s water came from local supplies, said Parks. “We have it so we’re going to use it.”
The district’s labor budget, which includes contributions for retiree health and pension benefits, is expected to increase next year by $344,000, or 5 percent, said the report.
An improved financial picture is also allowing the district to contribute $3.2 million to reserve funds next year, including the district’s rate stabilization fund, which is used to help offset rate increases when revenues decline, and its capital improvement fund, said the budget report.
In March, the district lifted all water-use restrictions on its customers, proclaiming an end to
“Plentiful local water, the cessation of drought restrictions, continued fiscal conservatism, and the implemented and proposed rate increases from the 2016 Cost of Service Study all contribute to a brighter financial picture for (Fiscal Year 2018),” said the Santa Fe district’s budget report.