Carlsbad proposing water rate increase, cites rising costs

CARLSBAD — The Carlsbad City Council approved a water-rate increase proposal over three years during its Nov. 3 meeting.

The city, which operates the Carlsbad Municipal Water District (CMWD) and handles water, wastewater and recycled water, will hold a public hearing on Jan. 11, 2022, before voting on final approval.

The water utility, one of three serving Carlsbad residents, must give customers 45 days’ notice and they have the right to protest, but if 50% or less of customers protest the proposal, then the council (which also acts as the Carlsbad Municipal Water District board of directors) can approve rate increases.

The rate increases will address a projected shortfall of revenues for capital improvement projects, along with cost increases to purchase water from the San Diego County Water Authority and treatment, according to Vicki Quiram, general manager of Carlsbad Municipal Water District.

She said the cost to buy water from the county water district has nearly quadrupled since 2006, although with the rate increases to water and wastewater, the city’s water district will still be some of the lowest in the county.

“The cost of purchased water is going up and up,” Quiram said. “Rates cannot exceed the reasonable and proportional costs and CMWD does not make profits (per state law).”

According to Quiram, increases would include potable, recycled and wastewater and would go into effect on March 1, 2022, and are based on a cost of service study conducted by the district.

As for the amount, the average single-family home is likely to see a $22.22 total increase over the next three years for wastewater. For water, the proposed increase is $2.56 over the same period.

Additionally, the cost to buy water from the county will increase by 5.5% next year, according to the staff report, and the county water district’s rates account for 69% of the cost of potable water expenses for the Carlsbad Municipal Water District.

The municipal district is expected to generate an additional $13.7 million between 2022-24 and to address capital improvements.

According to Ryan Green, the city’s finance director, the district plans out projects in five, 10 and 15-year increments.

“This has been an extremely well-run city for a long time and that we have these rates,” Councilman Peder Norby said. “It’s unfortunate that we’re in the situation with the cost of materials and projects.”

As it relates to wastewater, the city has not increased rates in years, even to meet inflation. Rates are needed to address aging infrastructure, delayed projects by the Encina Wastewater Authority, decreasing wastewater due to conservation causing higher treatment costs, EWA’s decision to pay off 100% of its pension liability in three years and $95 million in infrastructure projects over the next 10 years.

Also, the CMWD estimates demand increases of 0.3%, 0.7% and 0.5% over the next three years. Other cost factors include rising electricity rates for pumping water through the system.

The district operates more than $2.1 billion in assets, including 815 miles of underground pipelines, 14,000 water valves, 4,000 fire hydrants, 12 reservoirs, 11 wastewater lift stations and wet wells, and a water recycling treatment facility.