Why are the proposed rate increases necessary?

• Water
• Primarily driven by purchase cost of water, which has increased greatly as water suppliers such as the Metropolitan Water District (MWD) of Southern California have had to purchase more expensive water due to the drought, and reductions in lower cost State Water Project supplies due to pumping restrictions from the Sacramento Delta. Current increases expected by MWD will be about 40% in the next two years.
  
• Wastewater
• Funding of 21st Street lift station replacement
• Increased treatment costs

Is the Fairgrounds paying its fair share? Why is the Fairgrounds water rate going down?

• Yes, the Fairgrounds water and wastewater rates are based on fair and equitable cost allocation. 
  
• The Fairgrounds have reduced their water demands and capacity requirements. 
• Reduced demand on the water system
• Increase in recycled water
• Proportionate share of water costs have decreased
  
• Proposed Fairgrounds sewer rate recognizes increase capacity requirements and considers the capacity requests within the Agreement for sewer services agreed upon by the City and the 22 DAA in 2008.
• Proportionate share of sewer costs have increased

Why Don’t We Have Access to Recycled Water for Irrigation Purpose?

• The City distributes recycled water to the 22 DAA.  The remainder of the City isn’t plumbed to receive recycled water at the present time, and to do so would be expensive. 
  
• There are limited places in the City in which recycled water can be used.  Current law does not permit the use of recycled water for residential use, even for irrigation, due to the possible health hazards in areas in which contact with people is likely, and the risks that the recycled water could be consumed by children.

Why do We Need to Have Drought Rates?

• Water Demand Reduction Requirements
• Metropolitan Water District has declared a Level 2 Drought Restriction
• 13% total water reduction
• City’s total water reduction as determined by the SDCWA is 8%
  
• Financial Stability of Water and Sewer Funds
• Drought rates are designed to incentivize “smart” water usage, while protecting the financial stability of the utility funds.  By increasing the costs of the higher usage tiers, ratepayers will be more motivated to restrict usage to help reduce costs.  In addition, the higher usage tiers will generate addition income to pay excessive water use penalties imposed by the San Diego County Water Authority.

When Will the City Implement Drought Rates?

The City Council has not made the decision to implement drought rates at the present time, even though the San Diego County Water Authority declared a Stage 2 Drought Alert.  City residents are already conserving, and if the present level of conservation continues, the City may not need to implement the drought rate structure.  To help protect City revenues, the City Council may elect to implement a 10 percent increase in the fixed charge portion without implementing the drought rate tiers.

What is the Proposed Drought Rate Structure?

• Same structure as non-drought rates
• Fixed and volumetric charges
• Administrative ease
• Easily sunset with water restrictions are lifted
  
• Residential tiers based on individual usage patterns
• Base Block – Set based on individual winter water average (non-discretionary usage) with eight (8) units bi-monthly as a minimum.
• Blocks 2 & 3 – set usage

 Does this Drought Rate Structure Penalize People Who Conserve - Shouldn’t Everyone Be Given the Same Base Level?

• This structure attempts to protect people who conserve by establishing the minimum level of 8 units per bi-monthly billing period for indoor usage.
  
• By using the winter water use average, it provides a more accurate measure of actual water need than given all households the same base level, regardless of need.

How do I know that I am not unfairly impacted by the drought rates?

• What if I’m a low volume user?
• Minimal impact to water bill.  No increase to usage cost for “indoor usage.” Moderate surcharge to fixed monthly charge.
  
• What happens if I’m out of town during winter?  Will I get a zero unit based block?
• Each user will be provided a minimum usage block of 8 units per bi-monthly billing period.
  
• What if I have been conserving?
• Indoor conservation will save each ratepayer money.  Rates are based on a “per unit of usage” basis.
• Rate structure targets outdoor, “discretionary” usage. 
  
• If I have a special situation, such as a malfunctioning water meter during the winter measurement period, or new additions to the family can I appeal?
• Yes, section 21.70.050 of the Del Mar Municipal Code allows ratepayers to appeal if they have a special situation:  “…In accordance with the procedures provided above, the City Manager and the Appeals Board are authorized to make minor and limited modifications to any regulation in this Chapter when it has been demonstrated that due to special circumstances as applied to a particular case, the application of the unmodified regulation constitutes a threat to health, safety or welfare or will result in an undue, unreasonable hardship. ..”