New Proposed Water Rates
Every five years the District updates its foundational financial planning documents, including its Infrastructure Improvement Plan (IIP) and its Expenditure Forecast. This past December, the Board adopted an updated 2020-2025 IIP outlining the minimal level of investments necessary to provide quality water to District customers at the most reasonable cost. At 75 years old, the District faces the same challenges related to aging infrastructure as agencies across the state and the country. With nearly a billion dollars in assets, proactive replacement is simply not financially feasible. Yet as a lifeline service provider, the District must balance keeping rates low against the risk of failure to maintain water service to customers.
Adding to these challenges is the fact that when rates were last set five years ago, the District could not have foreseen the wildfires in the Lake Cachuma watershed, or the prolonged nature and severity of what ultimately became a historic eight year drought. Beyond those events, the rates that were set in 2015 also did not adequately capture the cost of operating the District’s complex water system in this new post-drought environment marked by significant water quality challenges. The need to draw on multiple water supply sources, and blend and deliver that water throughout the system to address water quality issues, requires significantly more resources in the form of energy costs, groundwater well infrastructure and capital investment throughout the District’s distribution system. Furthermore, additional treatment technologies have been required to ensure that surface water from Lake Cachuma meets new state and federal regulatory requirements.
Poor water quality at Lake Cachuma
The District’s IIP identifies $348 million in capital needs and recommends funding the most necessary and critical projects, which will cost approximately $50 million over the next five years. Specifically, 33 projects were selected to be funded because they:
- Meet local, state, and federal regulations for water quality and worker safety, or resolve utility conflicts;
- Maintain level of service by replacing inoperable equipment, and prioritizing projects that reduce the risk of service interruptions to the community or water loss; or
- Address critical deficiencies for which inadequate funding could jeopardize the District’s ability to serve customers, such as through reduced water production, major infrastructure failure, or not meeting water quality standards.
The capital needs identified in the adopted IIP subsequently informed the District’s 2020-2025 Expenditure Forecast (Forecast), which was considered by the Board of Directors in February 2020. The Forecast estimates total District expenses necessary to maintain the current level of service to customers including capital expenditures contained in the IIP and all operational expenses including water supply costs. The Forecast was then used to develop a Cost of Service Study, which allocated costs to each customer group and ultimately led to the development of corresponding rate models. The Board of Directors held meetings in March, April and May to consider the Cost of Service Study and associated rate models and select preferred rates. In accordance with state law, the community received notice that the Board of Directors will hold a hearing on June 23, 2020 to consider a change in the District’s future rates.
Even with the proposed rate change, District customers pay less for their water than all other residents and businesses on the South Coast of Santa Barbara County. Further, customers will still pay less than during the height of the drought, when the drought surcharge was in effect. While the timing is challenging given the ongoing COVID-19 pandemic, funding of the infrastructure necessary to maintain safe and reliable drinking water supplies for the Goleta Valley, and to continue to provide lifeline water service remains critical.
* Tier 2 is changing from 7-16 HCF to 7-12 HCF.
** Urban includes Multi-Family Residential, Commercial, and Institutional.
Consistent with the District’s five-year financial plan, an 11% increase will be assessed on July 1, 2021 and a 9% increase on the rates will be assessed on July 1 of each year beginning in 2022 through 2024.
Water Rate Calculator
Click here for a rate calculator to see how your bill may change.
Special Board Meeting Agendas and Presentations:
|Click here for the agenda and presentation for the April 30, 2020 Special Board Meeting.|
|Click here for the agenda and presentation for the May 4, 2020 Special Board Meeting.|
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