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Home My WebLink About2018 Rate Increase Notice - Irrigation and Commercial Agricultural Water ServiceNOTICE OF PUBLIC HEARING In Connection with Proposed CHANGES TO RATES, FEES, AND CHARGES FOR IRRIGATION AND COMMERCIAL AGRICULTURAL WATER SERVICE NOTICE IS HEREBY GIVEN that the Otay Water District (the “District”) will hold a Public Hearing on October 4, 2017, at 3:30 p.m. in the Board of Directors MeeƟng Room located at 2554 Sweetwater Springs Blvd., Spring Valley, CA 91978, to consider: (1) the adopƟon of rates, fees, and charges that apply to water billed beginning January 1, 2018; (2) the authorizaƟon, for a period of ﬁve years, for all future pass‐through increases or decreases to cover changes to rates, fees, and charges from the District’s water suppliers; and, (3) the authorizaƟon, for a period of ﬁve years, overall average increases to rates, fees, and charges, in addiƟon to the pass‐through increases, not to exceed 10 percent per year, for all costs other than pass‐through costs. These rates, fees, and charges apply to property for which you are shown as the record owner or customer of record. The purpose of the hearing is to consider all wriƩen protests against the proposed rates, fees, and charges that, if approved, will be imposed on properƟes served by the District. The changes in the proposed rates, fees, and charges and the basis upon which they were determined is described in more detail as follows. PROPOSED RATE CHANGES As part of the annual budget review process, the District’s Board of Directors typically proposes an overall rate increase to be implemented for January. This year the Board of Directors is proposing no overall rate increase on January 1, 2018. Even though there is no proposed overall rate increase for January 1, 2018, the District is proposing changes to the rate structure, rates, fees, and charges based on a comprehensive cost of service study completed in April 2017. These changes may cause your bill to change. The changes are reﬂected on page 3 of this noƟce. This study was conducted by an independent ﬁrm and proposes changes that reﬂect the District’s esƟmated cost of providing water service. If adopted, the proposed changes to rates, fees, and charges would take effect for water billed on or aŌer January 1, 2018, and may apply to water used as early as the beginning of December 2017. The rate structure has two basic components: (1) ﬁxed monthly charges and (2) variable monthly rates, fees, and charges which are based on water consumpƟon. The ﬁxed fees and charges are calculated to recover the cost of operaƟng and maintaining the public water system and are based on the customer class and size of the water meter serving the record owner or customer of record. Fixed Charges include the Metropolitan Water District of Southern California (MWD) and San Diego County Water Authority (CWA) fee, and the District’s System Charges. The variable rates, fees, and charges are consumpƟon based and include, but are not limited to, supply, treatment, and transportaƟon costs. Variable rates, fees, and charges generally impose greater charges as the level of consumpƟon increases. Variable components of the bill include the Water Rate and Energy Charge. The ﬁxed and variable components are calculated to recover the proporƟonate cost of providing the service aƩributable to each class of customer. The District will also consider authorizing, for a period of ﬁve years, passing through to customers the increased or decreased costs imposed by the District’s water suppliers including, but not limited to, MWD, CWA, and the City of San Diego. If adopted, the average customer’s water rates, fees, and charges will be adjusted annually for all increased or decreased costs and charges from the District’s wholesale water suppliers. The purpose of the hearing is to consider all wriƩen protests against the proposed rates, fees, and charges that, if approved, will be imposed on properƟes served by the District. Any changes to rates, fees, and charges subsequently imposed by the District will be subject to a 30‐day prior wriƩen noƟce, but will not be subject to addiƟonal hearings or protests. In addiƟon to the wholesale pass‐through costs, the District will consider authorizing, for a period of ﬁve years, average increases in rates, fees, and charges not to exceed 10 percent per year, for all costs related to labor, beneﬁts, materials, energy, maintenance, administraƟve expenses, and other operaƟonal costs of providing water service including, but not limited to, amounts required to meet bond covenants and to maintain adequate reserves and rate stability. WHY ARE YOU RECEIVING THIS NOTICE? As the record owner or customer of record of a property idenƟﬁed to be subject to the imposiƟon of proposed rate, fee, or charge increases, you may submit a wriƩen protest against the proposed acƟons. Provided, however, if the idenƟﬁed property has more than one record owner and/or customer of record, only one wriƩen protest for the property will be counted. Each protest must be in wriƟng and include: (1) the speciﬁc rate, fee, and/or charge for which the protest is being submiƩed in opposiƟon; (2) the locaƟon of the idenƟﬁed property (by assessor’s parcel number or street address); and, (3) the original signature of the record owner or customer of record submiƫng the protest. Protests submiƩed by email, facsimile, or other electronic means will not be accepted. WriƩen protests may be submiƩed by mail to the Board Secretary, Otay Water District, 2554 Sweetwater Springs Blvd., Spring Valley, CA 91978, or in person at the public hearing, as long as they are received prior to the conclusion of the public hearing. Please idenƟfy on the front of the envelope for any protest, whether mailed or submiƩed in person to the Board Secretary, that the enclosed leƩer is for the Public Hearing on the Proposed Changes to Rates, Fees, and Charges for IrrigaƟon and Commercial Agricultural Water Service. At the conclusion of the public hearing, the Board of Directors will consider adopƟng the proposed acƟons as described in this noƟce. Oral comments at the public hearing will not qualify as formal protests unless accompanied by a wriƩen protest. If, at the close of the public hearing, wriƩen protests against the proposed rate increase, fees, and charges are not presented by a majority of the record owners or customers of record of the idenƟﬁed properƟes upon which they are to be imposed, the Board of Directors will be authorized to adopt the proposed acƟons. If adopted, the rates, fees, and charges will apply to water billed on or aŌer January 1, 2018 and may apply to water used as early as the beginning of December 2017. This leƩer serves as a 45‐day noƟce of the hearing on the proposed rate changes, and as noƟce of the changes for water billed on or aŌer January 1, 2018, if adopted. (Continued on page 2) Si requiere asistencia en español con referencia a esta notificación, favor de llamar al 619-670-2222. Page 2 This noƟce is being provided to you by the District pursuant to the California ConsƟtuƟon ArƟcle XIII D (known as “ProposiƟon 218”). Under terms of ProposiƟon 218, the District is required to noƟfy the record owner or customer of record of proposed changes to property‐related fees such as water services. This leƩer serves as noƟce that the District will hold a public hearing to consider changes to its current water rates, fees, and charges. WHY ARE WATER RATE CHANGES NECESSARY? The proposed rate structure will provide water service at rates, fees, and charges that are equal to the reasonable cost of providing water service. Recent California law suggests that Ɵered water rates, fees, and charges designed solely to encourage water conservaƟon, may violate the California ConsƟtuƟon as amended by ProposiƟon 218. The new structure is designed to meet all applicable legal requirements and to fairly and equitably spread the District’s costs to provide water service among all customer classes based on the costs to serve those customers. The major proposed changes to the rate structure are: (1) eliminaƟng the residenƟal conservaƟon Ɵer; (2) eliminaƟng Ɵered rates for all rate classes except residenƟal and mulƟ‐residenƟal water service; and (3) modifying the system fee from one based solely on meter size to one based on meter size and customer type. AddiƟonally, the District is a revenue‐neutral public agency that provides water service to your community. “Revenue‐neutral” means that water bills reﬂect only those rates, fees, and charges sufficient to support water service. WHAT DO WATER RATES FUND? In the District, each end user pays his or her fair share of the cost of purchasing water, energy or pumping costs, labor and beneﬁts, materials, chemicals used in water treatment, administraƟve expenses, operaƟons, construcƟon and maintenance of the public water system and faciliƟes. This also includes amounts required to meet bond covenants and to maintain adequate reserves and rate stability. The District is a non‐proﬁt public agency, it does not make a proﬁt from providing water service and it cannot operate at a loss. WHY ARE WHOLESALER WATER SUPPLIERS RAISING THEIR RATES? Wholesale suppliers raise their rates as they work to obtain new and more reliable supplies of water. This includes more reliable emergency supplies, agricultural to urban water transfers, expansion of exisƟng reservoirs, pipeline relining projects, new water treatment plants, and new supplies. In addiƟon, rate increases cover the cost of acquiring water from the Colorado River, northern California, and desalinaƟon. In 2016, for instance, the CWA increased rates, fees, and charges in anƟcipaƟon of the Carlsbad Seawater DesalinaƟon Project becoming operaƟonal. The Carlsbad project, while providing San Diego County with a new locally controlled, drought‐proof supply of water, increased water rates for all San Diego County water customers. The District works conƟnually to reduce internal costs to absorb rate increases from suppliers. The District recognizes and is sensiƟve to the impact the higher cost of water has on its customers. In its effort to minimize the impact of these cost increases the District has reduced its number of full‐Ɵme equivalent (FTE) employees by 23 percent since 2007. The District is commiƩed to becoming as efficient as possible, providing the services its customers expect and rely upon, while conƟnuing to be one of the lower cost water service providers in San Diego County. RELIABILITY AND SUPPLY DIVERSIFICATION Water is essenƟal to our region’s quality of life. Our economy depends on it. Families and businesses cannot survive without it. Unfortunately for San Diego County residents, our region does not beneﬁt from an abundant natural supply of water. The county receives an average of 10 inches of rainfall per year, meeƟng only ﬁve percent of local demand. Because of our semi‐arid climate, approximately 85 percent of the water used locally is imported from Northern California and the Colorado River. Not only is the cost of imporƟng water becoming increasingly costly, but populaƟon growth, drought, environmental regulaƟons, liƟgaƟon, compeƟƟon for a scarce resource, and increased power costs are driving the price we pay higher. San Diego County’s wholesale and retail water agencies recognized the region was highly dependent on imported water during a severe drought that occurred in the late 1980s and early 1990s. They have conƟnued to diversify the region’s water supply and ensure a reliable system, increasing water independence, providing for future populaƟon and economic needs, and reducing the likelihood of a future water shortage. Since then, major iniƟaƟves have been undertaken to develop both new supplies and improved reliability. At the regional level, in 2003, the CWA signed a milestone agreement to address decades of water disputes over the allocaƟon of water from the Colorado River. As part of that agreement, San Diego County residents paid to have old, leaky earthen canals in Imperial County lined to save water. This “saved water” is now used by customers in the San Diego region. The CWA also started producing desalinated seawater from the Carlsbad DesalinaƟon Plant in late 2015, producing approximately 50 million gallons per day, enough to serve seven to 10 percent of the region’s demand. AddiƟonally, the District is acƟvely supporƟng the development of a seawater desalinaƟon facility in Rosarito Beach, Mexico. If completed, the water from this facility could replace up to two‐ thirds of the water the District receives from Northern California and the Colorado River. A result of these major projects, such as the canal linings, water transfers, seawater desalinaƟon, and reservoir construcƟon and expansion efforts, is that the wholesale cost of water has gone up dramaƟcally in recent years, and it is an expense being borne by all water users. Rising costs are ﬁnancially difficult for everyone, but having made these investments in new supply and improved reliability, the region is beƩer able to ensure that families, businesses, and the local economy will have the water they need. WHAT CAN I DO TO SAVE MONEY? Customers interested in learning ways in which they can reduce their water usage and therefore minimize the effects of the rising cost of wholesalers’ water supplies on their family’s budget, can visit the District’s conservaƟon web page at otaywater.gov. AddiƟonally, the Water ConservaƟon Garden located on the campus of Cuyamaca Community College in Rancho San Diego is open to the public and offers various conservaƟon exhibits, programs and classes. For more about the Garden, visit thegarden.org. For informaƟon about the District, please visit otaywater.gov, contact us via email at info@otaywater.gov, or call us at 619‐670‐2222. (Continued from page 1) Si requiere asistencia en español con referencia a esta notificación, favor de llamar al 619-670-2222. Footnotes 1. This cost varies based on water usage and can be calculated using the consumpƟon block tables. One unit of consumpƟon equals 748 gallons of water or one HCF (hundred cubic feet). The changes in the Water Charges and Water Rates are based on the results of the cost of service study. Customers outside the Otay Water District, outside an Improvement District, or using temporary potable meters pay two Ɵmes this rate. 2. There is no proposed overall rate increase for January 1, 2018. However, based on a comprehensive cost of service study, there are changes in the rate structure, rates, fees, and charges. Projected rates (2019‐ 2022) are for informaƟonal purposes only, and use an inﬂator factor of four percent. 3. The Fixed System Charges, based on meter size and customer class, ensure that customers pay their proporƟonate share of the water system replacement, maintenance, and operaƟng expenses. The MWD & CWA Charges are based on meter size and match, in total, the cost charged by wholesale water suppliers. The changes in the ﬁxed charges are based on the results of the cost of service study. 4. Your bill will vary based on meter size, water consumpƟon in units, and geographic locaƟon. 5. The Energy Charges represent the cost of energy required to pump each unit of water 100 feet in elevaƟon. This is charged proporƟonately for every foot of elevaƟon over 450 feet. This increase is due to increased power costs to the District. 6. The Government Fee is a per unit charge and your bill will vary based on water consumpƟon. This charge is in lieu of tax revenues paid by non-government customers. 7. Fire Service requires a separate meter and is a monthly charge based on meter size. There is no proposed rate increase for ﬁre service on January 1, 2018. This informaƟon reﬂects changes to the rate structure, rates, fees, and charges. For a comprehensive lisƟng of rates, fees, and charges, please see the Otay Water District’s Code of Ordinances at otaywater.gov. MWD & CWA Charges3 by Meter Size ‐ 2018 Proposed and 2019‐2022 Projected2 Meter Size Current 2018 Proposed 2019 Projected 2020 Projected 2021 Projected 2022 Projected 3/4" $15.00 $15.45 $16.07 $16.71 $17.38 $18.07 1" $27.84 $28.68 $29.83 $31.02 $32.26 $33.55 1 1/2" $62.96 $64.85 $67.44 $70.14 $72.95 $75.87 2" $107.08 $110.30 $114.71 $119.30 $124.07 $129.04 3" $227.75 $234.60 $243.98 $253.74 $263.89 $274.45 4" $364.72 $375.68 $390.71 $406.34 $422.59 $439.49 6" $746.59 $769.02 $799.78 $831.77 $865.04 $899.64 8" $1,205.65 $1,241.89 $1,291.57 $1,343.23 $1,396.96 $1,452.84 10" $1,735.39 $1,787.55 $1,859.05 $1,933.41 $2,010.75 $2,091.18 Meter Size Current 2018 Proposed 2019 Projected 2020 Projected 2021 Projected 2022 Projected 3/4" $15.91 $30.40 $31.62 $32.88 $34.20 $35.56 1" $22.47 $42.93 $44.65 $46.43 $48.29 $50.22 1 1/2" $38.88 $74.28 $77.25 $80.34 $83.55 $86.90 2" $58.55 $111.85 $116.32 $120.98 $125.82 $130.85 3" $111.04 $212.13 $220.62 $229.44 $238.62 $248.16 4" $170.10 $324.98 $337.98 $351.50 $365.56 $380.18 6" $334.18 $638.44 $663.98 $690.54 $718.16 $746.88 8" $531.05 $1,014.56 $1,055.14 $1,097.35 $1,141.24 $1,186.89 10" $760.72 $1,453.33 $1,511.46 $1,571.92 $1,634.80 $1,700.19 Otay Fixed System Charges3 by Meter Size ‐ 2018 Proposed and 2019‐2022 Projected2 Other Charges Current 2018 Proposed 2019 Projected 2020 Projected 2021 Projected 2022 Projected Energy Charges5 $0.44 $0.053 $0.055 $0.057 $0.059 $0.062 Government Fee6 $0.41 $0.41 $0.43 $0.44 $0.46 $0.48 Fire Service Monthly Charge7 ≤3” Meter $20.77 ≤3” Meter $20.77 ≤3” Meter $21.60 ≤3” Meter $22.60 ≤3” Meter $23.36 ≤3” Meter $24.30 ≥4” Meter $27.98 ≥4” Meter $27.98 ≥4” Meter $29.10 ≥4” Meter $30.26 ≥4” Meter $31.47 ≥4” Meter $32.73 Other Charges4Size ‐ 2018 Proposed and 2019‐2022 Projected2 ConsumpƟon Block 2018 Proposed Current 2018 Proposed 2019 Projected 2020 Projected 2021 Projected 2022 Projected 0 ‐ 54 $5.68 55—199 $5.74 200 or more $5.81 IrrigaƟon and Commercial Agricultural Water Rates for 3/4”‐1” Meters ‐ 2018 Proposed and 2019‐2022 Projected1,2 All units $5.27 $5.48 $5.70 $5.93 $6.17 IrrigaƟon and Commercial Agricultural Water Rates for 3” Meters and larger ‐ 2018 Proposed and 2019‐2022 Projected1,2 0 ‐ 550 $5.68 551 ‐ 1,200 $5.74 1,201 or more $5.81 All units $5.27 $5.48 $5.70 $5.93 $6.17 ConsumpƟon Block 2018 Proposed Current 2018 Proposed 2019 Projected 2020 Projected 2021 Projected 2022 Projected IrrigaƟon and Commercial Agricultural Water Rates for 1‐1/2‐2” Meters ‐ 2018 Proposed and 2019‐2022 Projected1,2 0 ‐ 144 $5.68 145 ‐ 355 $5.74 356 or more $5.81 All units $5.27 $5.48 $5.70 $5.93 $6.17 ConsumpƟon Block 2018 Proposed Current 2018 Proposed 2019 Projected 2020 Projected 2021 Projected 2022 Projected Page 3 Si requiere asistencia en español con referencia a esta notificación, favor de llamar al 619-670-2222.