County water managers said Thursday that the financial challenges they face could force them to considerably increase fat water rates next year, a decision that would lead to higher water bills in a large part of the county.
The officials stressed that their discussions were preliminary and that no decision is scheduled before June.
“What will be presented to you today is a project, preliminary, early, initial, could be, powerful, non-finalized, beginner budgetary,” said Nick Serrano, Chairman of the Board of Directors of the San Diego County Water Authority. “It is not a final product, and it is not a proposal that this advice supports at this stage.”
Serrano and other members of the board of directors said that many variables could change before June, including the new offers to sell the additional water supply of the authority and new statistics on customer demand.
But officials of the water authority said they had a “small room for maneuver” to avoid what should now be an increase in the two -digit percentage rate next year.
The authority’s rates stabilization fund has been considerably exhausted to soften the rate increases earlier in the pandemic and in the past two years.
The Metropolitan Water District in southern California has already approved a rates of 8% for the calendar year 2026, which will increase the costs of the County Water Authority.
Although the authority has concluded water sales offers in recent years which have brought in $ 40 million, they have left fewer opportunities for potential additional agreements to continue.
The Trump administration could try to cancel a subsidy of $ 19.4 million that the authority was allocated last spring by the US Department of the Interior for an admission pipe at the Carlsbad desalination plant.
And although demand can fluctuate, the greatest variable seems to be the sharp reduction in March rains on the use of customer irrigation. The use of use aggravates the finances of the authority, no better.
A leap into large prices would require almost all local water agencies to pass on additional costs to its customers, but the amount of transmission could vary considerably.
Some agencies buy less water in large than others, in particular those with storage of the groundwater or other local water supplies. And some agencies have already built an increase in the water authority projected in their prices.
The managers of the water authority say that the fundamental problem they face is that they have borrowed money to build and maintain a much more important storage and delivery system than what is now necessary.
The officials expected that demand increases as the population increases and the development has widened, but member agencies have regularly bought less water in the past two decades.
The director general Dan Denham said that the authority was in the middle of a three -year plan to stabilize its finances and its smooth rates so that they increase more slowly and predictably.
Making more agile authority when it comes to concluding agreements with other water agencies in southern California is a key objective, he said. Current disputes with the Metropolitan Water District on rates and other problems could help.
“It put us in a box in terms of operations and not to have the flexibility to move water,” said Denham about the multi -year dispute. “I can’t wait to conclude this settlement agreement.”
Denham and other general directors have also trained a working group which will begin to meet soon to discuss cooperation strategies between water agencies, including agreements for excess supplies.
The working group meetings will be held in camera without members of the board of directors or other participants or observers.
“We must have a very frank discussion between MCs in this region as to the type of roadmap on which we are,” he said.
The water authority will also start to analyze if it should buy the private carlsbad desalination plant. Denham said that the assessment of financial risks and the state of the factory would be key precursors to such a decision.
“All this will have to start to perform over the next two years,” he said.
Losing the federal subsidy of $ 19.4 million would be a major blow.
“We are still expecting these funds, but until it is in our current account, I don’t think we are going to be very comfortable,” said Pierce Rossum, responsible for the price and the debt of authority.
The authorities should offer a range of possible rate increase for 2026 in April, then shrink this to a specific increase in May. A final vote of the board of directors is scheduled for June.
The city of San Diego, which controls 10 of the 36 seats on the board of directors, has successfully listened to lobby to reduce rate increases.
Last year, officials proposed an increase between 16% and 22% in April, but the board of directors ended up approving a 14% increase.
Originally published:
California Daily Newspapers