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Posted on: April 5, 2023

New Water Rate Structure and Rate Change Approved by SFID Board

glass of water

At the March 28th special meeting, the Santa Fe Irrigation District Board of Directors approved a new single-family potable water rate structure and rate change to be implemented April 1. This action comes after 14 months of public meetings and workshops to educate and update board members and community members on the District’s long-range financial plan, potential rate structure alternatives, and rate drivers. Individual customer impacts will vary based on meter size, water usage, and customer type. These adjustments and new rate structure for single-family customers will be seen by customers in their June bill at the earliest. 

The newly approved rate structure is a four-tier single-family rate structure with meter-overlay to replace SFID’s current five-tier structure with meter-overlay. The change in rate structure is primarily due to the loss of a local water supply from Lake Hodges due to inadequate maintenance from the City of San Diego. 

There are three primary cost drivers for the newly approved rate structure and rate adjustments: 

  • Loss of local, less expensive water supply from Lake Hodges. Water cannot be stored or moved from the reservoir because of the unsatisfactory rating by the Division of Safety of Dams. The dam and reservoir are owned and maintained by the City of San Diego, and SFID only has water and storage rights. 
  • Increased costs of imported water supply from the San Diego County Water Authority and Metropolitan Water District. Due to the loss of local water supplies, SFID must now purchase additional, more expensive water from SDCWA. SFID has absorbed the wholesale pass-through for two and a half years due to strong financial reserves. SDCWA is currently projecting an approximate 14% increase in rates for 2024. 
  • Inflationary pressure on goods and services necessary to run the District. An increase in costs to chemicals, supplies, fuels, energy, and construction costs that provide vital water services to customers. 

To mitigate additional increases, the Board has also directed staff to utilize $2.5 million in rate stabilization funds and to defer any non-critical capital projects. 

“Approving an increase in water rates is not a decision this Board has taken lightly,” said Michael T. Hogan, Board President. “We have had many difficult discussions in the past year about the cost of doing business, the new normal of reduced water use and increased regulatory oversight. The loss of our local, less expensive supply from Lake Hodges due to deferred maintenance on the dam by the City of San Diego is disappointing to say the least. Still, we remain committed to working with them to find cost-effective and timely solutions for the benefit of all our ratepayers.” 

The newly approved cost of service study and rates are valid for two years, per Board direction. This will allow the District flexibility to modify rates in response to potentially changing water supply conditions and operational costs.

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