San Diego County Water Authority begins budget process

The San Diego County Water Authority (SDCWA) last week started a months-long public process to refine its next two-year budget and draft a preliminary proposed rate increase for 2024. The average rates charged by the Water Authority are currently projected to rise by approximately 14% next year, though agency staff and board members are assessing strategies to lower the number.

“This budget and rate cycle is unlike any other in the Water Authority’s history because it involves balancing the demands of maintaining water reliability in 310 miles of pipelines with inflationary pressures that we haven’t seen in decades and numerous other factors,” said General Manager Sandra L. Kerl.

“We know that the rising cost of water creates downstream impacts, particularly on our most vulnerable populations, and we are leaving no stone unturned in the quest to minimize the cost burden,” Kerl added. “Those efforts include advocating for state and federal funds, assessing potential new revenue streams, and reassessing how rates are set.”

$1.8 Billion Budget for FY '24-25

The draft recommended budget of $1.8 billion for fiscal years 2024-2025 is 5% larger than the current two-year budget. Approximately 90% of SDCWA’s budget is for purchasing, treating and delivering water, combined with debt service and Capital Improvement Projects to ensure water is available when and where it’s needed.

As in years past, operations – including all agency staff and day-to-day work functions – account for about 7% of SDCWA’s budget.

Kerl said that the Water Authority has taken aggressive budget- and rate-control measures for the past several years, leaving fewer options this year. Those actions have included front-loading savings on debt-refinancings to reduce budget impacts in prior years, which means the impact of that debt will grow in the next two-year cycle.

To mitigate rate increases, Water Authority efforts also have included draws from the Rate Stabilization Fund, which is expected to be near the bottom of the Board’s target range in June.

In addition, the Water Authority has secured tens of millions of dollars over the past two years to help residents pay their water bills – and it has distributed $90 million to member agencies from successful rate case litigation – money that otherwise could have defrayed Water Authority costs.

April Workshops

The budget and rate setting process will occur over the next several months and is open to the public.

Water Authority staff will present preliminary draft budget and rate information to the Board on March 23, and the Board is planning to host budget workshops on April 11 and 13 at the Water Authority headquarters in Kearny Mesa.

Two more budget workshops are planned for May 9 and 11. All workshops are open to the general public.

The recommended budget for fiscal years 2024 and 2025 and the proposed rates and charges increase will be formally presented to SDCWA’s Board of Directors on May 25, and are scheduled to be considered by the Board for adoption on June 22.

For more details, visit SDCWA’s website at sdcwa.org. ■