HomeMy WebLinkAbout2014 Rate Increase Notice - Landscape Agricultural and Contruction Water ServiceNOTICE OF PUBLIC HEARING
In Connection with Proposed
CHANGES TO RATES, FEES, AND CHARGES FOR LANDSCAPE,
AGRICULTURAL, AND CONSTRUCTION WATER SERVICE
NOTICE IS HEREBY GIVEN that the Otay Water District (the
“District”) will hold a Public Hearing on September 4, 2013, at 3:30
p.m. in the Board of Directors Meeting Room, 2554 Sweetwater
Springs Blvd., Spring Valley, CA 91978, to consider: (1) the adoption
of rate, fee, and charge increases that apply to water billed
beginning January 1, 2014; (2) the authorization for a period of five
years of all future pass‐through increases or decreases to cover
changes to rates, fees, or charges from the District’s water
suppliers; and, (3) the authorization for a period of five years overall
average rate increases, in addition to the pass through increases,
not to exceed 10 percent per year, of 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 written protests against
the proposed rates, fees, and charges that, if approved, will be
imposed on properties served by the District. The amount of the
proposed rate, fee, and charge increases and the basis upon which
they were determined is described in more detail as follows.
PROPOSED RATE INCREASES
An overall water customer average rate increase of 7.5 percent
was considered by the District’s Board of Directors as part of the
annual budget review process. If adopted after the public hearing
noticed above, the water rate increase is proposed to take effect
with water billed on or after January 1, 2014, and may apply to
water used as early as the beginning of December 2013.
The District has performed a Cost of Service Study and Rate Study
(i.e. reviewed rates, fees, charges, costs, and the consumption
usage structure) and determined that increases in the rates, fees,
and charges are necessary in order to recover sufficient revenues to
operate and maintain the public water system. The proposed rate,
fee, and charge structure will provide revenue that recovers costs
reasonably borne in providing the service; are equitable to all
customer classes; and are proportionate to the cost of providing the
service to each customer class.
The rate structure has two basic components: (1) fixed monthly
fees and (2) variable monthly rates and fees, which are based on
water consumption. The fixed fees are calculated to recover the
cost of operating and maintaining the public water system and are
based on the size of the water meter serving the record owner or
customer of record. Fixed fees include the Metropolitan Water
District of Southern California and San Diego County Water
Authority (MWD & CWA) fee, and the District’s System Fee. The
variable rates, fees, and charges are consumption based and include
but are not limited to supply, treatment and transportation costs.
Variable rates and fees generally impose greater charges as the
level of consumption increases. The variable components are
structured in such a way as to deter waste and encourage
conservation. Variable components of the bill include the Water
Rate, Energy Charge, and Water Charge by Improvement District.
The fixed and variable components are calculated to recover the
proportionate cost of providing the service attributable 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. 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 pass‐through costs apply to
rates, fees, and charges from the District’s water suppliers. The
suppliers include but are not limited to the Metropolitan Water
District of Southern California, San Diego County Water Authority,
and the City of San Diego. Any changes to rates, fees, and charges
subsequently imposed by the District will be subject to a 30‐day
prior written notice, but will not be subject to additional hearings or
protests.
In addition to the wholesale pass‐through costs, the District will
consider authorizing, for a period of five years, average rate
increases not to exceed 10 percent per year for all costs related to
labor, benefits, materials, energy, maintenance, administrative
expenses, as well as other operational costs of providing water
service, including amounts required to meet bond covenants and to
maintain adequate reserves and rate stability.
The proposed water rate increase in the average amount of 7.5
percent will pass‐through increases implemented by the District’s
water wholesalers (MWD’s 5 percent increase and CWA’s increase
of 4.3 percent) and will allow the District to recover other increases
in operational costs. Water wholesalers do not anticipate additional
rate increases in 2014, but they do expect to implement increases in
January 2015 and in subsequent years.
As the record owner or customer of record of a property
identified to be subject to the imposition of proposed rate, fee, or
charge increases, you may submit a written protest against the
proposed actions. Provided, however, if the identified property has
more than one record owner and/or customer of record, only one
written protest will be counted. Each protest must be in writing;
state the specific rate increase for which the protest is being
submitted in opposition; provide the location of the identified
property (by assessor’s parcel number or street address); and
include the original signature of the record owner or customer of
record submitting the protest. Protests submitted by e‐mail,
facsimile, or other electronic means will not be accepted. Written
protests may be submitted by mail to the Board Secretary, Otay
Water District, 2554 Sweetwater Springs Blvd., Spring Valley, CA
91978, or in person at the public hearing, so long as they are
received prior to the conclusion of the public hearing. Please
identify on the front of the envelope for any protest, whether
mailed or submitted in person to the Board Secretary, that the
enclosed letter is for the Public Hearing on the Proposed Increase
to Landscape, Agricultural, and Construction Water Rates, Fees,
and Charges.
At the conclusion of the public hearing, the Board of Directors will
consider adopting the proposed actions as described above. Oral
comments at the public hearing will not qualify as formal protests
unless accompanied by a written protest. If, at the close of the
public hearing, written 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 identified properties upon
(Continued on page 2)
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which they are to be imposed, the Board of Directors will be
authorized to adopt the proposed actions. If adopted, the rates,
fees, and charges will apply to water billed on or after January 1,
2014 and may apply to water used as early as the beginning of
December 2013. This letter serves as a 45‐day notice of the hearing
on the proposed rate increases, and as notice of the increases for
water billed on or after January 1, 2014, if adopted.
This notice is being provided to you by the District pursuant to
the California Constitution Article XIIID (collectively known as
“Proposition 218”). Under terms of Proposition 218, the District is
required to notify the record owner or customer of record of
proposed changes to property‐related fees such as water services.
This letter serves as notice 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 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. To continue to provide reliable, safe and
high‐quality service, the District must implement and pass through
to its customers the higher cost of water imposed by suppliers. This
year, as in recent years, a large percentage of the increase is a
direct result of higher costs from suppliers and represents a direct
pass‐through from those suppliers. The water suppliers include the
MWD, CWA, and the City of San Diego.
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, administrative
expenses, operations, construction and maintenance of the public
water system and facilities. 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 are raising 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 existing reservoirs, pipeline relining projects, new
water treatment plants, and new supplies including ocean water
desalination. In addition, rate increases cover the cost of acquiring
imported water from the Colorado River and Northern California.
In 2016, for instance, the San Diego County Water Authority
anticipates increasing rates, fees, and charges in anticipation of the
Carlsbad Desalination Project (ocean water desalination) becoming
operational. The Carlsbad project, while providing San Diego County
with a new locally controlled, drought‐proof supply of water, could
have significant upward pressure on water rates for all San Diego
County water customers.
For its part the District works continually to reduce internal costs
to absorb rate increases from suppliers. The District recognizes and
is sensitive to the impact the higher cost of water has on its
customers. As a result the District is committed to becoming as
efficient as possible, while providing the services its customers
expect and rely upon.
RELIABILITY AND SUPPLY DIVERSIFICATION
Water is essential to our region’s quality of life. Our economy
depends on it. Families and businesses cannot survive without it.
Unfortunately for San Diego residents, our county does not benefit
from an abundant natural supply of water. San Diego receives an
average just 10 inches of rainfall per year, meeting only 5 percent of
local demand, and that is not enough to support our region’s
population of 3.1 million people or its $188 billion economy.
Because of our semi‐arid climate, 82 percent of the water used
locally is imported from Northern California and the Colorado River.
Not only is the cost of importing water becoming increasingly costly,
but population growth, drought, environmental regulations,
litigation, competition 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. The entities have continued to work aggressively to develop
a more reliable water supply system ‐ one that would increase
water independence, provide for future population and economic
needs, and reduce the likelihood of a future water shortage. Since
then, major initiatives have been undertaken to develop new
supplies and improved reliability.
At the regional level, CWA signed a milestone agreement to
address decades of water disputes over the allocation of water from
the Colorado River. As part of that agreement, San Diego residents
paid to have old, leaky earthen canals in Imperial County lined to
save water. This “saved water” is now used by customers in San
Diego County. This year, the region will receive 80,000 acre‐feet of
water from the canal lining projects (enough water to supply
approximately 160,000 homes). Through a combination of land
fallowing and efficiency‐based water conservation measures with
farmers in Imperial County, the region was able to purchase
another 100,000 acre‐feet of water in 2012 (enough water to supply
200,000 existing homes). The water we receive from this part of the
agreement will ramp up to 200,000 acre‐feet per year by 2021.
Since the 1990s, the District embarked on its own efforts to
develop new supply and today operates one of the largest recycled
water networks in California. As a benefit, when the drought hit our
region in 2008, because of your investments in a recycled water
system used for landscape irrigation, mandatory water conservation
was not imposed on Otay Water District customers. Additionally,
the District is actively supporting the development of an ocean
water desalination facility in Rosarito Beach, Mexico. When built,
the water from this facility could replace up to two‐thirds of the
water we receive from Northern California and the Colorado River.
A result of these major projects, such as the canal linings, water
transfers, and reservoir construction and expansion efforts, is that
the wholesale cost of water has gone up dramatically 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
better able to ensure that families, businesses, and the local
economy will always have the water it needs.
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 imported water on their family’s budget, can visit the
District’s Conservation page at www.otaywater.gov. Additionally,
the Water Conservation Garden located on the campus of
Cuyamaca Community College in Rancho San Diego is open to the
public and offers various conservation exhibits, programs and
classes. For more about the Water Conservation Garden, visit
www.thegarden.org. For information about the Otay Water District,
please visit www.otaywater.gov or contact us via email at
info@otaywater.gov.
(Continued from page 1)
Footnotes
1. This cost varies based on water
usage and can be calculated
using the consumption block
tables. One unit of consumption
equals 748 gallons of water.
Customers outside the Otay
Water District, an Improvement
District, or using temporary
meters pay two times this rate.
2. Projected rates (2015‐2018) are
for information purposes only.
The inflator factor used is 7.5
percent for 2014‐2017 and 2.3
percent for 2018.
3. These fees are based on the
meter size. The MWD&CWA fee
is increasing to match the cost
from the District’s water
suppliers. The System Fee is
increasing to pay for higher
water system replacement,
maintenance, and operating
expenses.
4. The Energy Charge represents
the cost of energy required to
pump each unit of water 100
feet in elevation. This is charged
proportionately for every foot of
elevation over 450 feet. This
increase is due to increased
power costs to the District.
5. This charge is a per unit charge
and your bill will vary based on
water consumption.
6. Fire Service requires a
separate meter and is a
monthly fee based on meter
size. The Fire Service Fee is
decreasing based on the Cost
of Service study.
This information reflects only
changes to rates. For a
comprehensive listing of rates,
please see the Otay Water
District’s Code of Ordinances.
MWD & CWA Fixed Fees(3) by Meter Size—2014 Proposed and 2015‐2018 Projected(2)
Meter Size Current 2014 Proposed 2015 Projected 2016 Projected 2017 Projected 2018 Projected
3/4" $13.28 $14.45 $15.53 $16.70 $17.95 $18.36
1" $22.12 $26.79 $28.80 $30.96 $33.28 $34.05
1 1/2" $44.31 $60.61 $65.16 $70.04 $75.30 $77.03
2" $70.85 $103.08 $110.81 $119.12 $128.06 $131.00
3" $141.71 $219.23 $235.67 $253.35 $272.35 $278.61
4" $221.43 $351.09 $377.42 $405.73 $436.16 $446.19
6" $442.80 $718.69 $772.59 $830.54 $892.83 $913.36
8" $708.53 $1,160.59 $1,247.63 $1,341.21 $1,441.80 $1,474.96
10" $1,015.06 $1,670.55 $1,795.84 $1,930.53 $2,075.32 $2,123.05
Meter Size Current 2014 Proposed 2015 Projected 2016 Projected 2017 Projected 2018 Projected
3/4" $16.74 $16.19 $17.40 $18.71 $20.11 $20.58
1" $21.26 $22.87 $24.59 $26.43 $28.41 $29.06
1 1/2" $32.57 $39.58 $42.55 $45.74 $49.17 $50.30
2" $46.13 $59.62 $64.09 $68.90 $74.07 $75.77
3" $82.29 $113.08 $121.56 $130.68 $140.48 $143.71
4" $122.99 $173.22 $186.21 $200.18 $215.19 $220.14
6" $236.02 $340.29 $365.81 $393.25 $422.74 $432.46
8" $371.64 $540.76 $581.32 $624.92 $671.78 $687.24
10" $529.88 $774.64 $832.74 $895.19 $962.33 $984.47
System Fee(3) by Meter Size ‐2014 Proposed and 2015‐2018 Projected(2)
Other Charges Current
2014
Proposed
Energy Charges(4) $0.042 $0.048
Improvement District(5)No. 3 $0.21 $0.21
Improvement District(5)No. 10 $0.27 $0.27
La Presa(5) $0.08 $0.08
Fire Service(6)
≤3” Meter
$21.14
≥4” Meter
$28.49
$34.57
2015
Projected
$0.051
$0.21
$0.27
$0.08
≤3” Meter
$22.73
≥4” Meter
$30.63
2016
Projected
$0.055
$0.21
$0.27
$0.08
≤3” Meter
$24.43
≥4” Meter
$32.92
2017
Projected
$0.059
$0.21
$0.27
$0.08
≤3” Meter
$26.26
≥4” Meter
$35.39
2018
Projected
$0.061
$0.21
$0.27
$0.08
≤3” Meter
$26.87
≥4” Meter
$36.21
Government Fee $0.29 $0.31 $0.33 $0.36 $0.38 $0.39
Consumption Block(1) Proposed Current 2014 Proposed Projected 2015 Projected 2016 Projected 2017 Projected 2018
0 ‐ 49 0 ‐ 54 $3.87 $4.17 $4.48 $4.81 $5.18 $5.29
50 ‐ 132 55 ‐ 199 $3.95 $4.25 $4.57 $4.91 $5.28 $5.40
133+ 200+ $4.01 $4.32 $4.64 $4.99 $5.36 $5.49
Landscape, Agricultural, and Construction for 3/4” ‐ 1” Meters—2014 Proposed and 2015‐2018 Projected(2)
Landscape, Agricultural, and Construction for 3” Meters and larger— 2014 Proposed and 2015‐2018 Projected(2)
0 ‐ 1,044 0 ‐ 550 $3.87 $4.17 $4.48 $4.81 $5.18 $5.29
1,045 ‐ 8,067 551 ‐ 1,200 $3.95 $4.25 $4.57 $4.91 $5.28 $5.40
8,068+ 1,201+ $4.01 $4.32 $4.64 $4.99 $5.36 $5.49
Landscape, Agricultural, and Construction for 1‐1/2 ‐ 2” Meters ‐ 2014 Proposed and 2015‐2018 Projected(2)
0 ‐ 144 0 ‐ 144 $3.87 $4.17 $4.48 $4.81 $5.18 $5.29
145 ‐ 355 145‐355 $3.95 $4.25 $4.57 $4.91 $5.28 $5.40
356+ 356+ $4.01 $4.32 $4.64 $4.99 $5.36 $5.49
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NOTICE OF PUBLIC HEARING
IMPORTANT INFORMATION ABOUT LANDSCAPE, AGRICULTURAL,
AND CONSTRUCTION WATER SERVICE
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NOTICE OF PUBLIC HEARING
IMPORTANT INFORMATION ABOUT LANDSCAPE, AGRICULTURAL,
AND CONSTRUCTION WATER SERVICE
Otay Water District
2554 Sweetwater Springs Blvd.
Spring Valley, CA 91978‐2004
www.otaywater.gov