From the General Manager
Summary Report as the District Moves into Fiscal Year 2017/18
Fiscal Year 2017/18 Adopted Budget
The District adopted its fiscal year 2017/18 budget on June 28, 2017. Some of the notable points are as follows:
- Above average rainfall in Santa Barbara County and across the State this past winter improved local water supplies. The District’s current water supplies can support a 28% increase over last year’s water use (3,127 acre feet per year in FY2016/17 to 4,000 acre feet per year this fiscal year). Based on the District’s current available water supplies and projected demands (in compliance with State law,) the District projects having sufficient water supplies through 2020.
- The District will not implement a 7.4% rate increase for fiscal year 2017/18 at this time. In 2013, the District developed a Cost of Service Study and adopted Resolution 2107, providing for annual rate increases from fiscal year 2013/14 through 2017/18, to cover the District’s projected operating costs and capital replacement needs. The anticipated increase in revenue from increased water sales is projected to be sufficient to cover the District’s operating expenses, including capital improvement programs, without implementing the annual rate increase.
- In response to exceptional drought conditions and a limited water supply, the District declared a Water Shortage Emergency and adopted drought ordinances in 2014 establishing monthly water allocations and penalties for consumption in excess of allocations. Because of the improvement in the District’s overall water supply condition, the District will continue its suspension of penalties for water use in excess of monthly customer allocations.
- With improved local water supply conditions and less of a need to acquire supplemental water than in recent years, the District is ramping up its Capital Improvement Program. Among other capital expenditures, the District plans to replace over two miles of 1920’s distribution pipelines to improve the reliability of water deliveries to customers.
- In March, 2015, the District established a Water Shortage Emergency (WSE) surcharge. The purpose of the surcharge is to recover lost revenue resulting from a substantial decrease in water consumption following the establishment of monthly water allocations and penalties. As water sales increase, the surcharge will be reduced. With our projected increase in water sales this fiscal year, the District anticipates a reduction in the surcharge mid-year if water sales trend around 4,000 acre feet.
- A significant portion of the District’s annual expenses are fixed, such as those associated with capital debt repayment, the State Water Project and Joint Powers Authorities. The 2017/18 Budget forecasts the District keeping tight control of variable expenses, with a minimal increase of approximately 1%.
- Improving water supply reliability remains a top priority for the District. To improve the reliability of the State Water Project, the District will be investing in the purchase of regional groundwater storage within the Semitropic Groundwater Storage District, located in California’s central valley. Storing water in a groundwater bank ensures water availability when supplies are needed most such as during drought periods. This banked water will be delivered through the State Water Project when State water deliveries are reduced, increasing the reliability of the State Water Project from 60% to nearly 100%.
The District began a rate study more than a year ago, but it has been on hold as new long term local and reliable water supply options such as desalination and recycled water are being evaluated. With the current 5-year financial plan in its final year, the District will likely be completing this rate study in early 2018, with or without acquisition of a new water supply. It is anticipated that with completion of this rate study, the Water Shortage Emergency surcharge will be eliminated.
2015 Urban Water Management Plan Update (UWMP)
The District filed its UWMP with the Department of Water Resources in May, 2017. In accordance with State Law, its purpose is to inform customers of the District’s long-term water resource planning to ensure adequate water supplies for existing and future demands. It sets a path towards meeting the State’s goal of reducing water consumption by 20% in 2020. The District is currently in compliance with State Law and on track to being in compliance in 2020. Targeted sales for 2020 are approximately 4,300 acre feet. Sales above this would violate State law. Therefore, the District is trending towards sales of 4,000 acre feet in fiscal year 2017/18, in order to gradually approach, without overshooting, the 4,300 acre feet limit in 2020.
2016 Consumer Confidence Report (CCR)
The District’s water quality once again meets and exceeds all State and Federal water quality standards. To ensure that our water is safe to drink, we comply with the United States Environmental Protection Agency and the State Water Resource Control Board limits for various contaminants in drinking water. In addition, the District’s state certified water treatment facility and staff monitor your water quality continuously. Results of this monitoring are summarized in the 2016 Consumer Confidence Report which can be found on the District’s website.
Water Supply Update
While the District’s water supplies have improved significantly from this time last year and the drought is seemingly over for most of the State, unfortunately it continues here in Santa Barbara County. The following is an update on our current water supply:
Water Supply Reliability
The District continues to focus on developing permanent, local, reliable water supplies. Several opportunities continue to be explored:
Copies of all documents referred to here: 17/18 Budget, 2016 CCR, 2015 UWMP Update, and the Quarterly Water Supply Update are all available on our web site. For easy reference please visit: https://www.montecitowater.com/public.htm or call 805-969-2271.
Montecito Water District’s mission is to provide an adequate and reliable supply of high quality water to the residents of Montecito and Summerland, at the most reasonable cost. In carrying out this mission, the District places particular emphasis on providing outstanding customer service, conducting its operations in an environmentally sensitive manner, and working cooperatively with other agencies. For additional information visit www.montecitowater.com, like Montecito Water District on Facebook, and follow on twitter @MontecitoWater.