Water District Will Raise Rates

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The South Coast Water District plans an incremental increase in water and sewer rates over the next five years that will add about $87 a year to the typical bill of a homeowner beginning July 1.

The new calculations will partly underwrite more than 60 capital improvement projects district wide, including the $80 million Doheny ocean water desalination plant.

A hearing on the rate plan is planned for 6 p.m. Thursday, June 23, in the Dana Point Council Chambers, 33282 Golden Lantern St.

A more immediate district meeting about replacing a mile-long recycled water line in Coast Highway is set for 6:30 p.m. Wednesday, May 18, in district offices, 31592 West St.

The proposed new rates are intended to more fairly reflect customer use and eliminate previous disparities where one service subsidized another, said Andy Brunhart, general manager of a district that includes South Laguna, Dana Point and Capistrano Beach.

Water rates in the Laguna Beach County Water District, which serves customers north of Wesley Drive, will not be revised for another two years, General Manager Renae Hinchey said.

The most significant change in the South Coast district’s revenue scheme is how fees are apportioned, shifting more of the district’s fixed operating costs to customer’s semi-annual property tax bill. If the board approves the rate increase, monthly bills will now only reflect water use and will likely decline, and all sewer and water infrastructure costs show up as additions on property tax bills, Brunhart explained.

The fixed costs that the district’s 12,000 customers shoulder for supplying water and sewage disposal – now amounting to about $900 a year for the typical homeowner — will include a new fee, known as a peak demand fee, he said. It reflects the district’s costs of meeting full capacity on a 110 degree July day when tourists inundate the district’s service area.

Individual customers will be billed only for their portion of peak demand based on the month when their use was its second-highest. “That’s our leverage for conservation,” Brunhart said.

The greater complexity in billing reflects the district’s effort to comply with recent court rulings and Proposition 218, which require more transparency of government finance, said Wayne Rayfield, the district’s president.

Another change will affect customers of recycled water, such as schools and hotels, which were paying at a lower rate than drinking water. “We’re now correcting that,” said Rayfield, though recycled water customers will not be subject to peak demand fees.

Earlier, the district held nine hours-long public workshops, which were sparsely attended by no more than 20 people. Last week, the district’s mailing of a seven-page notice also drew few responses from customers, said Brunhart.

The state’s long-running drought and customer conservation cut use by 27 percent since last June also play a role in why the district needs to recalculate how it charges for its service, Brunhart said.

Sewer charges currently are based on water use, half of which was consumed on landscaping prior to mandatory cutbacks imposed last year.

Due to conservation and a drop in revenue, the district has tapped reserves to cover its operating costs for the past eight months, Brunhart said. “It’s why we need to stabilize rates,” he said.

But the district also needs step up and complete capital improvement projects, which were postponed to keep rates stable, Rayfield said.

The rate increase will cover about half the cost of $79.3 million in proposed district projects over five years, while the remainder will be paid through cash flow, Brunhart said. That tally omits the $80 million tab to rehab a sewer tunnel in the ocean bluff top, set to get underway in September. State funding will underwrite its reconstruction and require repayment only after completion of the project, expected to take at least five years, Brunhart said.

Included in that tally is about 20 percent of the total estimated $80 million cost of the desalination project near Doheny Beach. The plant is expected to supply the district with up to 5 million gallons per day by June 2019, meeting 75 percent of the district’s needs.

The district’s current dependence on its out of region suppliers, the Metropolitan Water District and the state Water Project, put its customer at risk in the event of an earthquake that disrupts pipelines, Rayfield said. “It’s incumbent on us to produce water locally if you can,” he said.

Ocean advocate Mike Beanan thinks the district’s spending priorities are askew. He thinks more should be spent on infrastructure to increase use of recycled water. “More recycled water translates to more revenues for water districts since we have an unlimited supply at the Coastal Treatment Plant. In addition to Laguna’s wastewater, more than 7 million gallons of wastewater flows from inland cities past the CTP each day to be discharged only 1.2 miles offshore,” he said.

The revised game plan announced by the governor this week for dealing with the state’s persistent drought is likely to mean more relaxed conservation measures for both water districts serving Laguna. District leaders don’t yet know the new targets.

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