Santa Fe Irrigation District board postpones decision on water rate increases


watermeterBy Joe Tash


In the face of stiff opposition from ratepayers regarding proposed water rate increases of up to 36 percent over the next three years, directors of the Santa Fe Irrigation District put off a decision on the controversial proposal until their next board meeting on Nov. 18.

A public hearing on the proposed rate increase was held at the water district’s headquarters on Thursday, Oct. 21. The hearing room was packed with about 40 people who sometimes applauded as speaker after speaker came up to the microphone to criticize the prospect of higher water bills. More than 80 people submitted written protests to the district, officials said.

After listening to the speakers, the board voted 4-1 to delay the vote until next month. The decision means the board won’t decide on the proposed rate increases until after the Nov. 2 election, when one member, Augustus “Augie” Daddi, faces a challenger. Two other directors, board president Michael Hogan and director John Ingalls, are unopposed for new four-year terms.

Ingalls voted against the delay at Thursday’s meeting.

“I am opposed to kicking this can down the road. We need a rate increase,” Ingalls said. “People came today to see what the rate increase is going to be Jan. 1, 2011,” Ingalls said. “This has been studied exhaustively.”

Ingalls said he is convinced a rate increase is needed for 2011, but the board should consider other options for the following two years, such as issuing revenue bonds that would spread out the costs of capital improvements planned by the district. That is one way the district could avoid rate increases of up to 12 percent in 2012 and 2013, as staff has recommended, he said.

However, other members of the board said they want to evaluate the comments made by ratepayers before making a final decision. In addition, the district is in negotiations with employees on a new labor agreement, and with an outside agency for costs of treating recycled water, which could have a bearing on needed rate increases, directors said.

The board met Thursday to consider a package of rate increases for the next three years. If approved, water rates would rise 12 percent on Jan. 1, increasing the average bill bi-monthly to $242 from $216 next year. The proposal also permits increases of up to 12 percent in each of the following two years.

The proposal comes on the heels of water rate increases in the district of 50 percent over the past three years.

Speakers at Thursday’s meeting were uniformly opposed to the rate increases as proposed.

Dan Hayes of Rancho Santa Fe said if the full 36 percent increase is approved, he calculated his own water bill would rise by more than 100 percent over a six-year period.

“That’s an unsustainable business model. We cannot pay these bills forever,” Hayes said.

“I didn’t hear how deep you’ve dug into operating costs, salaries and pensions. We need you to do that,” he said.

Herbert Holmquist of Rancho Santa Fe said the district should look into outsourcing some of its work to private companies. “The only people getting salary increases these days are people getting paid by taxpayers or utilities.”

Greg Gruzdowich said the process of considering the rate increases was a “rigged game,” because it would take 50 percent of ratepayers filing written protests to block the board from instituting the rate increases. He also objected to compensation paid to board members, which include per diem and expense allowances, and health and dental benefits, which were reported in an Oct. 7 story in the Rancho Santa Fe Review and Solana Beach Sun.

“Why am I as a ratepayer paying to have your teeth cleaned? It’s not right,” Gruzdowich said.

Barbara Bray of Rancho Santa Fe urged the board to send a letter to Gov. Arnold Schwarzenegger, asking him to approve desalination plants along the California coastline, such as a project planned for Carlsbad.

“All I read about is environmentalists whining about the fish,” said Bray. “Be aggressive. Be proactive.”

Carlie Headapohl, a trustee with the Rancho Santa Fe School District, also objected to the board’s compensation, such as per diem payments and health and dental benefits. She said school board members, who are also elected, receive no compensation, although the time they put into their work is commensurate with a part-time job.

“I think that is job No. 1 to review that policy,” she said. “It needs to go away.”

Board president Hogan responded to some of the comments and questions after the public hearing was concluded. He said changes in the allocation of Colorado River water, a drought in the Southwest and environmental restrictions in Northern California have all tightened the water supply, causing districts such as Santa Fe to have to buy more expensive water from other sources.

At the same time, he said, water agencies have had to conserve water to ensure an available supply, and that fixed costs remain even as revenue shrinks from reduced water sales.

“This is a difficult decision for us,” Hogan said.