The Santa Fe Irrigation District Board of Directors will hold a Public Hearing May 19th regarding proposed rate increases. A majority of Directors have indicated their intention to vote in three years of rate increases that range from 23.2% to 46.8%, while over 30% of single family residences will receive a -4.6% decrease.
At the April 21st Board meeting, the preliminary FY 2017 budget was presented. What follows is a discussion of the troubling flaws in the COSS analysis that have direct impact on the District’s ability to raise the revenue claimed in the 8-page “Notice of Public Hearing” mailed out April 1st.
Current Rates: Proposed Rates: FY 2016 FY 2017 FY 2018
Tier 1 0 – 15 hcf 2.70 0 – 15 hcf 2.12 2.30 2.54 “Blue” rates are less
Tier 2 16 – 300 hcf 3.84 16 – 37 hcf 2.55 2.78 3.06 than rates set four
Tier 3 over 300 hcf 4.39 38 – 165 hcf 4.75 4.98 5.46 years ago.
Tier 4 over 165 hcf 5.34 5.82 6.38
The new tier 2 cut-off number of 37 hcf is based on the “projected bi-monthly amount of water historically available (ten year avg.) in Lake Hodges”. But, for two of the three Fiscal Years of this rate increase, SFID now reveals there will be only 800 AF of local water available in 2016 and 2017.* *Available local water unknown for FY 2018.
Let’s zero in on the actual cost of water, per hcf, as set forth in the COSS Rate Proposal, page 47, Table 6-13: Derivation of Rates:
Actual cost of water Amount required Availability of water and source
Tier 1 0 -15 hcf .74 (local water) 1160 acre ft. 800 acre ft. (short 360 AF of local water)
Tier 2 16 – 37 hcf 1.00 (local water) 1672 acre ft. ZERO local water available
Tier 3 38 – 165 hcf 2.75 (imported) 2589 acre ft. Imported water available
Tier 4 over 165 hcf 2.75 (imported) 3232 acre ft. Imported water available
- Cost of Service Study designed rates based on local water now admitted not available.
- COSS, p. 13, Table 3-1 stated 3268 AF of local water would be available in each FY ’16 through FY ’20.
- Now we are told only 800 AF of local water is available ’16 & ’17…2 of the 3 year rate proposal period, and SFID has already drawn down all available FY 2016 local Lake Hodges water in Jan. – Mar.
- The proposed rates sell water for 74 cents/1 dollar that SFID must then purchase for 2.75!
- A combined total of $2,921,381.** in additional water costs for FY ‘16 & FY ‘17 results from the grossly over- estimated local water availability in the COSS. (** adj. for 7 mo. remaining in FY ’16.)
Question: How will SFID make up the $2,921,381 cost escalation resulting from the flawed rate structure? Where will SFID get revenue to offset the -4.6% rate decrease for over 30% of their single family customers and the cost escalation resulting from the grossly over-estimated projections of available local Lake Hodges water?
Chart below compares actual current Single Family customer revenue (left column) with proposed FY 2016 revenues that have been adjusted to reflect no local Lake Hodges water available for remainder of 2016. Why is this important? SFID tells us they need an additional 9%, 9%, 9% increased revenue. Single Family Residence water sales yield over 75% of the District’s total revenue. Their flawed local water availability assumption wrecks havoc with their estimated Single Family revenue for FY 2016 & FY 2017.
Usage Current Water price Proposed ’16 Water price Cost escalation/Local Water Actual Cost of Water
15 units 40.50 31.80 loss of 30.15 revenue loss -38.85
50 units 174.90 147.31 loss of 68.65 revenue loss -96.24
150 units 558.90 601.76 loss of 68.65 revenue loss -25.79
250 units 939.06 1119.64 loss of 68.65 revenue gain +111.93
Turn in a Written Protest Form by May 18th. Act Now.