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Proposed Water Rate Changes


The Value of Water

Providing safe and reliable drinking water that meets or exceeds all water quality standards is a primary objective of the City’s Water Resources Division. To achieve this objective, rates are set to generate sufficient revenue to invest in capital improvements, meet mandated standards of treatment, service debt obligations, and balance reserves. The City’s proposed water rate increases will fund investments needed to ensure that the City continues to deliver safe and reliable drinking water to our customers.

We recognize the tremendous difficulties the COVID-19 pandemic has brought on so many, which is why we have taken assertive measures to reduce bill impacts by deferring infrastructure projects and forgoing last year’s planned rate increase. At the same time, our duty and responsibility to deliver safe, high-quality water is utmost importance.

Drinking water travels through hundreds of miles of pipelines, pump stations and treatment facilities all before it arrives in our taps. The proper care, maintenance, and operation of our water distribution system requires resources to ensure safe, clean, and reliable drinking water is available in our community.  

Cost of Service

By law, rates may not exceed the cost of providing service, and must be proportionally allocated to the benefit received by each customer class, such as residential, commercial and irrigation users. A comprehensive study has been conducted by an experienced rate consultant to evaluate the total costs needed to provide safe, reliable water service in accordance with industry standards. The cost-of-service factors include operations and maintenance, securing water supplies, capital improvements, State and Federal drinking water treatment standards, reserve levels, and debt obligations. Revenue for these service costs are generated solely through the assessment of water rates and fees, not through general tax revenues such as Measure C. 

    

Replacing Aging Infrastructure, Planning for Tomorrow

The Santa Barbara community was not built out steadily over time, but rather experienced a dramatic growth rate in the 1950s and 1960s. The cast iron pipes that were used during this post-World War II period have proven to be of lesser quality and are declining or failing earlier than expected. Approximately 44% (135 miles) of the City’s water main pipelines are made of cast iron. Nationwide, cast iron experiences 5 times more breaks per mile than all other pipe materials used in our system. Rather than waiting for problems to occur, City Council set a goal in 1987 to replace three miles of water mains annually. Despite this effort, the City is experiencing an increasing number of water main breaks, leading to costly emergency repairs and service interruptions. In response, City Council recently set a new goal to replace six miles annually.

Minimizing Rate Increases

The City makes every effort to keep our rates as low as possible for our customers while still providing sufficient revenue to operate and maintain the water system. While we must keep pace with important water system investments, we also understand the difficulties faced by so many in the last year. We made temporary cuts to operations and capital projects, recognizing the unique challenges of the pandemic and delayed the planned rate increase until 2021.

In 2020, Santa Barbara also entered into a water sales agreement with the Montecito Water District for the long-term wholesale supply of water made available from the Charles E. Meyer Desalination Plant. This agreement helped to offset costs and keep rates lower for Santa Barbara customers. Without this agreement, the City would need to consider increasing rates above what is being proposed, reduce planned capital investments in aging infrastructure, or use a combination of these actions. Continuous deferral of capital funding would lead to underinvestment in the water system and higher maintenance costs in the future.

The City has implemented a grant strategy that involves identifying, tracking, pre-positioning and pursuing all grants for which the water utility is eligible. We also continue to offer customer assistance programs including payment plans, utility tax waivers, leak relief and rebates.

Frequently Asked Questions

Why does it seem like my rates go up every year?

All City utilities—water, wastewater and solid waste—are billed under one bill. Typically, at least one of these three services increases their rates within each year. Because they are all billed together, it can seem like your water rates increase annually. However, volumetric water rates for some of our customer classes have not increased in the past four years. For more information on understanding your bill, click here.

I voted for Measure C, shouldn't that be paying for water infrastructure needs?

Measure C was approved by voters in 2017 and provides general purpose funding. It is intended to provide funding for streets, sidewalks, storm drains and other street-related infrastructure, but does not currently provide funding for water system infrastructure. The water utility is primarily funded from customer fees and rates and does not receive appropriations from any general tax revenues.

How much do development projects pay to fund water infrastructure?

Development projects are required to pay capacity charges for new or increased water connections. This is because existing customers have been funding the utility system assets such as pipes, pumping stations, treatment plants and reservoirs through their monthly water bill payments. Capacity charges make it equitable for new and existing customers to be billed at the same rates. Water and sewer capacity charges for a new 5/8” meter (the smallest meter the City offers) total about $13,500 for a home or small commercial development project. Charges for larger meters increase based on meter size. 

The water use from development projects add, on average, 40 acre-feet per year which is 0.35% of our annual water demand. In the City, almost all development is redevelopment, as there are very few vacant parcels. Some projects result in a net water reduction in water use due to stringent plumbing codes and landscape requirements that promote more efficient water use.

Santa Barbara is known for its leadership in water conservation and I know I am doing my part. So why are water rates going up?

Given the historical challenges with Santa Barbara’s water supplies, the City has become a leader in water conservation and has designed its rate structure to promote the efficient use of water. Water bills are made up of two key components: (1) a volumetric charge based on water usage and (2) a fixed monthly service charge based on meter capacity. Even though most of the costs to maintain and operate the water system are fixed, the City’s water rate structure is designed to minimize increases to fixed charges and collect the majority of revenue (70% or more) through volumetric charges, which are dependent on water usage. 

This gives customers more of an opportunity to reduce their water bill by decreasing water usage. In addition to the fixed and volumetric rate structure, the residential tiers, commercial base allotments and irrigation water budgets are designed to promote conservation and allocate costs appropriately to efficient and discretionary water use. The City’s tiered rate structure is supported with a diverse water supply portfolio, with different supply costs for each of the City’s associated water sources.

The revenue requirement, which is the total amount of funding that needs to be generated from rate payers in any given year to operate the utility and meet all financial and regulatory obligations, is increasing due to rising operating costs and a planned increase in capital investment in aging infrastructure. Under the proposed rate schedule, the Water Fund will be transitioning to a higher level of capital investment in its water distribution and treatment systems

Are there water rate meetings I can attend?

We will be hosting a public information webinar on Thursday, April 29 at 6 p.m. Community members are encouraged register here for the public meeting. The water rate hearing is set for City Council on Tuesday, June 15th at 2:00 pm, information on how to attend virtual City Council meetings can be found here.

 

Proposed Water Rate Changes for July 1, 2021

(1 HCF (Hundred Cubic Feet) = 748 gallons)
Please note that the tables below show the proposed rate changes for July 1, 2021 - June 30, 2022. For the proposed rates for the following two years please see the rate notice here.

Customer Class Tiers Proposed($/HCF) Current($/HCF)
Single Family Residential First 4 HCF $4.62 $4.44
Next 12 HCF $13.77 $12.96
All other HCF $25.89 $23.98
Multi-Family Residential First 4 HCF (per dwelling unit) $4.62 $4.44
Next4 HCF (per dwelling unit) $13.77 $12.96
All other HCF $25.89 $23.98
Commercial / Industrial 100% of Base Allotment $7.05 $7.01
All other HCF $25.81 $23.91
Irrigation - Residential & Commercial 100% of Monthly Irrigation Budget $13.77 $12.96
All other HCF $25.89 $23.98
Irrigation - Recreation / Parks / Schools 100% of Monthly Irrigation Budget $5.22 $4.88
All other HCF $25.41 $23.98
Irrigation - Agriculture 100% of Monthly Irrigation Budget $3.31 $3.01
All other HCF $25.41 $23.98
Recycled Water All HCF $4.53 $4.40
Outside City Limits Same as corresponding in-City rates

Proposed Monthly Service Charges

Meter Size Proposed Current
5/8” $29.57 $28.92
3/4” $43.29 $42.10
1” $70.72 $68.45
1 1/2” $139.31 $134.34
2” $221.61 $213.40
3” $482.24 $463.80
4” $866.32 $832.79
6” $1,785.37 $1,715.72
8” $3,294.26 $3,165.32
10” $5,214.67 $4,979.80
Last Updated: Apr 14, 2021
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