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Loan program encourages groups to convert to recycled water

ENCINITAS — For businesses and large developments, switching from potable to recycled water requires costly infrastructure upgrades. To help ease the burden, San Dieguito Water District is offering a new loan program.

About two weeks ago, the SDWD board approved setting aside $200,000 for loans to incentivize conversions.

While recycled water is 10 to 15 percent less expensive than potable water, the cost to switch ranges from $25,000 to $100,000, according to a SDWD staff report.

“That’s a non-starter for most,” Councilwoman Kristin Gaspar said on Tuesday.

“But if they’re able to take out a loan and make payments, that significantly reduces that out-of-pocket cost,” she added. “At the same time, they’re going to save money in the long run with recycled water.”

Gaspar noted bringing additional recycled water online would help the district meet a state goal of reducing potable water use 20 percent by 2020.

SDWD has worked to build miles of special purple pipes that supply recycled water. As a result, the demand for non-potable water has grown.

In 2000, SDWD recycled water use clocked in at 200 acre-feet. Demand is expected to reach roughly 765 acre-feet next fiscal year. That’s a jump of 95 acre-feet from this year, largely due to the Encinitas Community Park and Scripps Hospital agreeing to offer recycled water, according to a SDWD staff report.

Currently, recycled water makes up about 10 percent of SDWD’s portfolio.

Gaspar noted the district is taking a hard look at areas in the community where it makes financial sense to install additional purple pipes. Although expensive to build recycled water infrastructure, she noted more customers are requesting it.

In the meantime, now armed with the loan program, SDWD will ask sites near existing purple pipes to make the switch.

Because it’s in proximity to recycled water mains, Dramm and Echter, a company that grows flowers on two properties in Leucadia, was identified as a potential candidate for the loan program.

Bob Echter, owner of the company, said his business makes a point to conserve water. Still, his water bill runs $5,000 to $6,000 a month.

He called the price of changing to recycled water “a bit onerous.”

However, Echter said a loan could make conversion feasible, depending on the structure of the agreement.

On top of costing less, recycled water is less susceptible to supply disruptions, he added.

Bill O’Donnell, assistant general manager of SDWD, said the district will reach out to more groups about the program in the next few months.

O’Donnell said the $200,000 comes from a capital reserves fund that earns interest. SDWD envisions loan interest would be equal to the amount the district loses by not investing the money.

If the loan program is successful, the SDWD board could allocate more funds toward it, O’Donnell said.

SDWD serves about 38,000 customers in the western half of Encinitas. Olivenhain Municipal Water District covers the eastern portion, and that district also offers a similar loan program.

“Recycled water reduces our reliance on imported water, so it’s a priority for us,” O’Donnell said.

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