District Water Rates to Increase – CVN Article May 18, 2023

Inflation has touched every aspect of all our lives over the past few years, and the costs associated with supplying water to our customers are no different. Like all public water agencies, we must recoup the cost of ensuring high quality, safe and reliable water around the clock and that results in increased water rates. Our staff has received many questions and comments regarding the Proposition 218 notice that was mailed out specifying the proposed water rate increases over the next 3 years, so we wanted to use this opportunity to explain why these increases are necessary to continue to provide safe and reliable drinking water to the community. It is also important to note that our Proposition 218 notice sets the highest rate increases that could be implemented over the next three years. Our staff and Board of Directors are still actively working to tighten our projected budget, so that the final rate increases to be adopted in June may be less than those stated in Proposition 218 notice.

As a public water agency, we review our expenses each year to ensure that we can continue to cover the costs of delivering safe, reliable water to our customers.  This year it became apparent that we needed to increase rates to offset the increased expenses, largely driven by inflationary pressures. There are three major factors driving the budget increases for the next Fiscal Year (FY):

• Operational costs for the Cater Water Treatment Plant in Santa Barbara – these costs have significantly increased and account for the majority of the proposed budget increases for FY24 ($874K). We anticipate more modest increases for these costs after the first year in FY25 & 26.

• Employee costs for our invaluable staff, who keep everything running, are also increasing in FY24 due to wage pressure. These costs account for $432K of the proposed budget, increasing by ~$200K over normal years.

• Carpinteria Advanced Purification Project (CAPP). The proposed rate increases over the next three years have also been carefully designed to generate a portion of revenue for this critical facility that will ensure a locally-controlled, drought-proof water supply for the future, which will be completed by 2026. Fortunately, the District has been awarded several grants totaling $27 million, which will cover a significant proportion of the anticipated cost of constructing CAPP. However, some costs still must be recovered through rates. The proposed rates have been designed to generate an additional $500K each year for the next four years to fund the construction and operation of the CAPP project.

After seeing our imported surface water treatment costs nearly double this year and managing our highly-variable and vulnerable water supplies over the past decade of drought, it is evident that investing in a locally-managed and drought-resistant water source will be monumental for Carpinteria Valley Water District and our customers.  Through our partnership with the Carpinteria Sanitary District (CSD), CAPP will provide us with the facilities required to capture and purify water that would otherwise be released into the ocean. This purified water will be put into the Carpinteria Groundwater Basin (CGB), where it can be stored for later use by CVWD. The CAPP is currently in final design, and construction will begin at the end of next year. When the CAPP comes online, it will provide Carpinteria with greater resiliency when faced with unpredictable water supply conditions, including drought. It is noteworthy that even without the CAPP portion included in the rate increase, the rates proposed would be two-thirds or about 67 percent of what is currently shown in the notice.

We understand that any rate increase can be difficult during this inflationary period, and we remain committed to minimizing increases while ensuring the delivery of safe, reliable and sustainable water to our customers. We are developing a Frequently Asked Questions (FAQ) sheet about the rate increases that you will find on our website soon. You can also review our previous rate increase discussions by viewing the Board meeting recordings provided on our website. These discussions provide additional background on how the proposed increases on the Proposition 218 notice were calculated.

We urge our customers to keep a water-conscious mindset and encourage you to take advantage of some of our water-saving tools and resources. We continue to offer rebates for residential and commercial customers for water conservation fixtures and appliances as well as rebates on WaterWise Landscape upgrades. You may e-mail conservation@cvwd.net for additional information. You can also monitor your water use by signing up for a FREE EyeOnWater account at eyeonwater.com/signup  and set text and e-mail leak alerts to prevent water waste. For more information about other efforts underway for your water and other District updates, please visit our website cvwd.net, follow us on twitter @CarpWater, or Carpinteria Valley Water District on Facebook and Nextdoor.