ENCINITAS — The San Dieguito Water District has voted to present a proposed rate increase to ratepayers that would see lower rate hikes in the short term but higher costs on the back end.
The divided board —which is essentially the Encinitas City Council —voted 3-2 to proceed with a public hearing in January on a plan that would raise rates 6.5 percent next year and up to 6.5 percent in the following fiscal year. This was lower than two other options before the board, which called for 7.5 and 9 percent rate increases, respectively.
Staff’s recommendation, which the board did not select, would have raised rates the highest in the short term – 9 percent – but would have resulted in the district paying down its unfunded pension liabilities in 20 years as opposed to 30 years, saving ratepayers $2.7 million over the life of the repayment.
Board president Catherine Blakespear and Lisa Shaffer voted against the approved plan.
“Over the next 5 years, this was the most expensive of the 3 options proposed, but the one that had the lowest rate increase in the first two years,” Lisa Shaffer said in her weekly newsletter explaining her opposition.
Water districts across the state are approving plans for huge increases to the rates customers pay due to a variety of factors. Two of the major drivers are drought related: cities have been purchasing more expensive imported water as opposed to local sources, which have evaporated due to the lack of rainfall, and conservation efforts as a result of the drought have siphoned off the very revenue the districts rely on to operate.
Additionally, a recent lawsuit against the city of San Juan Capistrano has altered how rates and charges are calculated by requiring cities to justify their tiered rates.
This has resulted in higher rates for non-residential customers.
Finally, the state has required cities and water districts to start paying down its unfunded pension liabilities, requiring cities to divert hundreds of thousands of dollars to meet the mandate.