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Santa Barbara Council Leans Toward Approval of Planned Water Rate Increases

Dry winter forces city officials to further consider reactivating the desalination plant

Lake Cachuma has remained far below normal levels amid the ongoing drought. On Tuesday, Santa Barbara water resources manager Joshua Haggmark said the city would be exhausting its entitlement from the lake by the end of 2015.
Lake Cachuma has remained far below normal levels amid the ongoing drought. On Tuesday, Santa Barbara water resources manager Joshua Haggmark said the city would be exhausting its entitlement from the lake by the end of 2015. (Urban Hikers photo)

Faced with a “dismal” rainfall outlook during the ongoing drought, Santa Barbara officials on Tuesday gave a nod to planned water rate increases that would help restart the city’s long-dormant desalination facility.

The group that came out with the biggest gripe: some of the 60 or so avocado farmers with trees inside city limits.

Santa Barbara City Council members and city officials debated the merits of whether local farmers — upset with upcoming agriculture irrigation rates — should be given a break as a sort of public benefit during Tuesday’s meeting.

Agricultural water users already get some reprieve, since the city reserves a portion of its cheapest water for the industry, whose customers pay about 50 percent less than the lowest water using single-residential family.

Planned hikes would push ag rates up more than 50 percent from current levels (from $1.56 per hundred cubic feet to $2.43), because Santa Barbara is running out of its cheapest water, according to water resources manager Joshua Haggmark.

After hearing testimony from farmers, who touted avocado trees as saviors of homes during forest wildfires, the council decided to approve the rates as is, directing staff to make sure they had no wiggle room to help growers.

Drought rates are expected to go back before the council next Tuesday for final approval, and officials will make a final decision on restarting the plant in April.

Rates would be effective July 1 and could be lower depending on final cost figures.

Haggmark gave a brief drought update, showing that for the first time ever, the city would be exhausting its entitlement from Lake Cachuma by the end of 2015.

“We did not receive the rainfall we had hoped for this winter,” he said, noting that residents saved 5 percent less water in February than in previous months, in which they at least met 20 percent conservation requirements.

Because of rainfall uncertainty, Haggmark said, staff continues to work on securing additional supplemental water, pursuing drought-related capital projects, and sustaining a strong citywide conservation message.

The recycled water facility will be online in July, he said, and all three downtown wells — Corporation Yard, Vera Cruz, and City Hall — are operational.

A contract for restarting the desalination plant could be awarded in June, when the city hopes to confirm state loan funding, and it should be fully operational by fall 2016.

Ahead of the public hearing, the city received 44 written protests of raising water rates — 126 total when counting the 82 customers the city couldn’t reach because of a glitch in its address system. 

The capital cost of reactivating the plant was estimated at $32 million, and it could initially pump out 3,125 acre-feet of water per year. By 2017, the facility would increase capacity to 7,500 acre-feet, upping operating costs to $5.3 million a year.

Drought rates were designed to generate the $40 million needed to cover the cost of reactivating the plant, but only higher water users in Tiers 2 and 3 would be responsible for funding operating costs.

A single-family residential 5/8-inch meter would pay $9.18 more in monthly meter charges if 100 percent of the desalination debt service is recovered through fixed revenue.

Low to moderate water users could expect increases of $9 to $30, and the average user would see about a $20-a-month boost if the city activates the plant.

Rates must cover the cost of service, city staff said, which was why they didn’t think farmers could get any more of a consideration (ag uses account for less than 1 percent of the city’s total budget).

Haggmark cautioned that rates were based on water-use predictions and would be reassessed this spring and again next year.

A dozen or so public speakers were against the increases, most of them farmers or representatives from the California Avocado Commission, and others protesting desalination because of its high energy use.

City Attorney Ariel Calonne explained that Proposition 218, which outlines a municipality’s ability to set utility rates, does not address drought rates specifically, only that the city can create classes and quantify cost of service.

City Councilman Gregg Hart acknowledged that exempting farmers from rate increases could be a slippery slope.

In the future, City Councilman Bendy White said he hopes the state would allow cities to reward those conserving instead of punishing everyone with rate increases to make up for costs of maintaining water systems.

“We need to go forward with this,” Mayor Pro Tempore Cathy Murillo said. “I hope (desalination) really is our savior and not something that’s going to destroy us.”

Noozhawk staff writer Gina Potthoff can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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