The San Diego County Water Authority has asked for public input over the next two months as it drafts a new two-year budget and sets rates to cover the cost of water-reliability projects that keep San Diego immune from drought.
Agency staff has recommended a $1.85 billion budget for the two-year period beginning July 1, 2023, and ending June 30, 2025.
That represents a 5% increase, but the 2024 rate increase is tentatively set at 14%, though efforts are underway to lower that.
The difference is because water sales are down significantly from decades past, which puts upward pressure on rates because large fixed costs for reliability projects must be spread over fewer gallons sold.
“In a world where water supplies are both limited and valuable, it’s critical that San Diegans continue to do their part to use water as efficiently as possible,” said General Manager Sandra L. Kerl. “At the same time, we have to recognize the rate and budget impacts of conservation — not just for us but for all public water suppliers.”
San Diego was largely immune from the recent drought because of projects like the Carlsbad desalination plant and San Vincente Reservoir expansion, but is still paying off those investments.
The water authority is also facing cost increases for the water it still imports, with the Metropolitan Water District of Southern California raising rates by 7%, as well as inflationary pressure.
“This budget and rate cycle is unlike any other in the water authority’s history because it involves balancing the demands of maintaining water reliability in 310 miles of pipelines with inflationary pressures that we haven’t seen in decades and numerous other factors,” said Kerl.
She said the water authority has taken aggressive budget- and rate-control measures for the past several years, leaving fewer options now. Those actions have included front-loading savings on debt-refinancing to reduce budget impacts in prior years, which means the impact of that debt will grow in the next two-year cycle.
The water authority doesn’t make a profit, and sells only to retail water agencies in the county, so the final rates paid by the public will depend on local factors as well.
The water authority board is planning to host budget workshops on April 11 and 13 and again on May 16 and 18 at agency headquarters in Kearny Mesa. All workshops are open to the public.
The recommended budget for fiscal years 2024 and 2025 and the proposed rates and charges increase will be formally presented to the board on May 25, and they will be considered by the board for adoption on June 22.