Under the proposed rate structure the SDWD will add money into the rate stabilization fund.

From the SDWD staff report: Operating Reserve Rate stabilization reserves are used to help offset unexpected or unforeseen costs for purchased water or system repair True to its purpose the District has used this reserve to absorb some of the unexpected cost increases due to drought conditions The reserve will be below target for the next few years but will be built up over time and at target again by FY14 The Rate Stabilization Reserve is shown the figure.

Friends,

I am writing to urge you to protest the planned water rate increase for San Dieguito Water District (SDWD). You can do that by filling out the attached protest form and mailing it to the Encinitas Taxpayers Association so that it gets there by February 24.

The problem with the rate increase, as I see it, is twofold. First, the City is shifting some of its expenses to the SDWD, which results in higher rates. Second, the SDWD gives developers, businesses and the City a discount on rates. This results in higher rates to homeowners.

To prove my point, compare the proposed SDWD rates with the rates charged by the Olivenhain Municipal Water District's (OMWD). (The proposed SDWD and existing OMWD rates are in the attachments.) The SDWD serves Western Encinitas. The OMWD serves Eastern Encinitas. [OMWD uses more imported water and should be more expensive.] But, the proposed SDWD rate for homeowners is more than 50% higher than the OMWD rate. The differential is even greater in a drought, like the one we are in now.

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This was posted to the ETA blog. We've been able to confirm with SDWD staff that this is a draft of an essay submitted several years ago to the SDWD/City of Encinitas as part of a scholarship contest. It discusses reasons for wanting the SDWD to be independent from the City. The City/SDWD did not select this as the winning essay.

Today in California there are approximately 3,400 special districts. Each has a separate identity for their own specific interest. Each special district provides a variety of services from water distribution to fire protection. A board of directors governs each district. A special district can be defined as, “any agency of the state for the local performance of governmental or proprietary functions within limited boundaries.”

I believe the biggest benefit of special districts are the ability to serve specific needs of a community that might not be the needs of an adjacent community or a special district can fulfill the needs of several communities which might form to become one special district. The case in point is the San Dieguito Water District, which serves potable and recycled water to approximately 37,000 residents in Encinitas, Leucadia, and Cardiff by the Sea. These are three very different communities with the same need for a safe, reliable water supply for domestic, agriculture and industrial purposes.

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Back in January the ETA asked Mayor Dalager to speak with us, so that the ETA Board and members could ask him about the water rate increases and the relationship between the city and the water district. Dalager never responded.

An Encinitas resident recently forwarded us this response from Dalager. ETA comments are in italics:

People have been doing a good job of cutting back their water usage in response to the drought. It’s ironic, but as consumption of water goes down, fixed costs on everything from maintenance to debt service on the state system remains the same. Therefore, as usage declines, they charge us more per unit.

[Drought rates are going up ~20%, but so are non-drought rates (~13%/year). Mayor Dalager does not address this or the ETA’s main recommendations.]

I will not eat those costs and risk running this district into insolvency.

[We see no reason to think insolvency is an issue for the SDWD. The Council has already agreed to give raises this year and next year to SDWD staff and can afford to continue to issue generous pensions to its employees. More importantly, the water district has a rate stabilization fund, which should be used to keep rates from spiking. Times are tough and this is right time to use up the rate stabilization fund.]

Thank your lucky stars we and SFID (with whom we own Badger filtration plant) have water rights to Lake Hodges. The water from there costs us a fraction of state water. I have no intention of merging with some other district such as OMWD and having to share those rights.

[Because of this, we should wonder why OMWD water is cheaper than SDWD water. Merging with the OMWD would disadvantage SDWD customers. Dalager does not address the possibility of the SDWD merging with the SFID.]

Our district is run very efficiently and any cost savings would be more than offset by restricted access to our cheap local water.

[We do not know how Dalager measures efficiency and there is no reason to believe that if the council is not running the SDWD we would have to give up access to local water.]

Also, as much as I’ve looked at it, I have seen no upside to creating an extra level of bureaucracy that a second board would entail.

[The ETA has not suggested any new bureaucracy be created. However, it is correct that it would be necessary for the SDWD to hire its own legal counsel during negotiations with the City of Encinitas.]

We are in a very unique position; we have our own cheap, local supply. An increase in that is our real opportunity to get some rate relief. Pray for rain!

Dan Dalager
Mayor, City of Encinitas

[The increase in rates are not conditioned on water levels in Lake Hodges (our local supply). Perhaps, retail rates should be tied to Hodges water levels.]

From Jim Bond:

I do agree with you that we should reduce employees in the district and have done so with 2 employees retiring and no replacements for them.

[The city council did not discuss reduced staffing during the last budget adoption and it appears that at least one of those retirees is still working for the city as a contractor.]

As far as the cost of water goes, we have seen double digit increases for the last three years from our supplier, the San Diego County Water Authority who has not passed along the full increases to them from their supplier, the Metropolitan Water District of Southern California. SDWD too, has not passed along the level of rate increases we have received from SDCWA.

[The ETA agrees that the ratepayers should pay for those costs. The ETA is also skeptical that the there has been a vigorous effort to contain expenditures and overhead costs at the region water agencies. The SDWD is is a member of those agencies.]

I agree that we should be cost effective and believe we could be a bit more so by subsuming the Water District into the City to reduce administrative/overhead costs just as we have with the old Fire District and the two Sanitary Districts; Encinitas and Cardiff.

Warm Regards,
Jim

[The way in which the City has absorbed the SDWD, it would be interesting to know which costs could be reduced. Note, the fire district does not generate revenue and the sanitation districts have very high charges compared to the Leucadia Water District, which covers part of Encinitas but is not run by the City Council.]

We need to fill this box.

Rain fills the SDWD's reservoir, providing cheap water, but it keeps ETA fliers off the streets. There is little time to get the word out and rain stops us in our tracks. We are definitely going to need more help if it keeps raining. If you are willing to distribute fliers in your neighborhood, even if only on your block, send us an email at eta@encinitastaxpayers.org.

TS Eureka rejects water, sewer rate hikes

After several meetings and public outcry, the Eureka City Council voted unanimously to hold off on raising water and sewer rates and establish a citizen task force to help create new rates.

Although not enough protest letters were sent in to legally stop the hike, council members agreed that the rates were too high for people to handle at this time, the notification process was too confusing and senior citizens shouldn't be hit with such high rates.

If it had been approved, the rates would have increased by 66 percent for water and 87 percent for sewer in the next five years. The rates also included a method for calculating rates, which included Proposition 218 guidelines...