City of Santa Barbara Proposes Annual Rate Adjustments to Support and Maintain Critical Water and Wastewater Systems

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SANTA BARBARA, CA – May 1, 2024

The City of Santa Barbara has proposed rate adjustments to water and wastewater rates that will affect customers’ utility bills over the next four fiscal years. These recommendations are based on the cost to provide water and wastewater utility services, guaranteeing that future rates are sufficient to:

• Cover costs needed to operate and maintain over 600 miles of pipes, four treatment plants, and other essential facilities.
• Invest in critical improvement projects, including replacing old pipes and infrastructure that have reached the end of their useful lives.
• Recover from inflationary increases that have far outpaced planned costs built into current rates.

Several factors like regulatory changes, costs of essential materials, and aging infrastructure have resulted in significant cost increases to operate 24-hour water and wastewater service for the City’s 99,000 customers. The City replaces an average of six miles of water mains annually. In the last several years, the costs to the City for main replacement performed by local contractors have increased by an average of 20% per year.

“Unfortunately, there is no ‘do nothing’ option. Delaying important investments will only create more expensive projects in the future as construction and material costs increase over time. Putting off these investments could also lead to emergency repairs that will be exponentially more expensive than planned maintenance,” said Joshua Haggmark, Water Resources Manager.

Proposed Rate Increases

The average single-family home with water, wastewater, and trash and recycling services would see their utility bill increase from $241.65 to $253.31 a month for Fiscal Year (FY) 2025, reflecting a difference of $11.66 or an increase of 4.8%. Rates for water and wastewater services are anticipated to increase approximately 10% annually for Fiscal Years 2026-2028.

Even with the proposed increases, the City of Santa Barbara FY 2025 water and wastewater rates remain in line with neighboring agencies for average water users and are one of the lowest rates on the south coast for low users.

What Your Bill Pays For

Your water and wastewater utilities operate like non-profit entities. Per State law, all revenue collected from providing water and wastewater service goes toward operating and maintaining the water and wastewater systems. The Water and Wastewater programs do not support the City’s General Fund nor receive funding from it.

A breakdown of what your monthly bill pays for is as follows:

• 9% Water Sources
• 11% General Administrative Costs
• 12% Debt Service
• 19% Water Distribution and Wastewater Collection
• 24% Water and Wastewater Treatment
• 25% Infrastructure Reinvestment

It is important to note that the vast majority of costs do not vary based on water availability; infrastructure must be operated and maintained, even if reservoirs are full.

Customer Assistance is Available

The City is working hard to minimize rate increases while ensuring safe and reliable services that we rely on 24/7. For water customers, we continue to offer customer assistance programs including payment arrangement plans, a waiver of the Utility Users Tax for qualifying low-income customers, water bill leak relief, and a mixture of residential and commercial rebates to encourage the efficient use of water.

About Our Water and Wastewater Systems

The water and wastewater systems in Santa Barbara represent some of the largest public infrastructure investments in our City, requiring significant funds to replace aging pipes and facilities – some dating back to the 1890s, and to ensure safe, reliable service around the clock.

“Santa Barbara would not exist today without significant investments in the safe, clean, and reliable delivery of drinking water throughout our community and the 24/7 operation of a complex system that processes 2 billion gallons of wastewater annually,” said Haggmark.

To learn more about these rate changes, join our informational webinar on Wednesday, May 22 at 6:00 p.m. Visit SantaBarbaraCA.gov/RateChanges to sign up for the webinar and view additional information about the City’s proposed rate increases.