Ojai Farmers Face Another Water Hike

Casitas’ $14 million budget includes plans to raise rates 17 percent

By Daryl Kelley
Directors of the Ojai Valley’s largest water agency are set to consider a new budget supported by another sharp jump in the water rates to valley farmers.
The Casitas Municipal Water District imposed a 53 percent hike in the cost to irrigate crops last year, and is now considering another 17 percent increase in agricultural rates. At the same time, most Ojai Valley residents in the district will get a sharp reduction in rates resulting from the 2008-2009 budget to be considered at a public hearing later this month.
The hearing is to consider the water district’s $14-million spending plan for the year beginning July 1, which will be based partly on water rates that would be adopted after notification of customers in July and an appeals hearing in late August, officials said.
Casitas provides water for about 65,000 people and nearly 5,700 acres of farmland in the Ojai Valley and Ventura areas. About 200 farmers use approximately 44 percent of the district’s water.
“The net effect is we have come up with about a 10 percent increase, total,” said board President Jim Word at a water district meeting Wednesday. Indeed, the net operating increase to farmers is less than the 17 percent hike for water, because the district would reduce the monthly service charge to big users.
Unlike a year ago, when district chambers filled with concerned farmers, only two attended the meeting Wednesday during the first round of the budget discussion, as directors set a public hearing for June 20 at 4:30 p.m.
Also unlike last year, the two farmers who attended Wednesday’s meeting, although concerned about the new hikes, said they were pleased with how Casitas has gone about this round of increases, by hiring an independent consultant and inviting farmers to join the process.
“So far, it’s been open,” said Roger Essick, who farms more than 400 acres of oranges, avocados and tangerines in the picturesque east Ojai Valley. “But we still don’t have enough information. We still need to look at the rate model.”
“They’ve been very transparent,” said Jim Finch, who farms 200 acres of oranges, avocados and lemons near Foster Park and Ojai.
But, like the directors themselves, the farmers said they are waiting to see the details of the proposed rates when they are released by the district’s consultant in the next few days. The farmers said they’re concerned that basic 22 percent service charges for administration and overhead may be too high. They said they have not yet seen a breakdown to support that fixed charge.
The district is under pressure to follow state guidelines that require it to charge for water based on the actual costs of service, something it has not done in the past when it came to agriculture.
Homeowners already pay for the full cost of delivering their water. Historically, farmers have enjoyed a subsidized rate because the federally constructed Casitas Dam project was built partly to promote Ojai Valley agriculture. And even with the proposed increases, agricultural rates would still be much lower than residential rates.
A key consideration in raising farm rates has been a 2006 State Supreme Court decision in which justices ruled that Proposition 218, passed by voters in 1996, requires equitable distribution of water costs.
Even with the farmers’ rate increased from $208 an acre-foot to $312 this fiscal year, and perhaps to $365 by September, they would still pay far less than the $445 per acre-foot that residential customers pay.
Casitas officials have said they might be able to legally justify the lower rate because agricultural users do not need the high quality water delivered to their orchards since a sophisticated treatment plant was built a decade ago to meet state drinking-water standards.
If all costs, including treatment, were included, farmers would pay $521 an acre-foot, analysts have said.
But farmers fear that spiraling costs will eventually put them out of business.
“It’s the straw that will eventually break the camel’s back — the water costs and the fuel costs,” Finch said.
“The one thing,” Essick said, “that enables agriculture to continue in the Ojai Valley is reasonable water costs. And if that goes away, you’ll see a drastic change, especially in the East End … with its orange orchards.”
The panorama of orange orchards defines the bucolic East End. But oranges barely make economic sense even at today’s lower water prices, he said.
Higher water rates will force farmers to pump more from their own wells in years with good rainfall, like this one, then go back to Casitas supplies when underground water basins dry up during low-rain years.
That would create a yo-yo effect in Casitas revenue, Finch said, because the water district cannot count on selling water to farmers at the higher rates.
“I’ve often encouraged (the district) to look at what this will do to their sales,” Finch said. “In the end, the increases may not be beneficial to the whole (budget).”
Although calculations are tentative, water rate summaries released by Casitas this week show that the proposed new rates would be good news for about 2,600 residential customers in the Oak View area, with their water rates dropping sharply and their overall water bills dropping somewhat after an increase in the basic service charge is included.
The new water rates differ from customer to customer, depending on the size of a customer’s water meter and how much water is used.
For example, a resident with a typically sized water meter (five-eighths to three-fourths inch), using 34 units of water (748 gallons per unit) every two months, would pay $72.46 bi-monthly under the new rates, including a service charge of about $38. That’s $4.85, or 6.3 percent, less than the resident now pays.
For farmers, water rates would go up 17 percent regardless of the size of farm, but proposed reductions in fixed overhead costs would mean a smaller percentage increase in the overall water bill.
For example, a farmer with 40 irrigated acres would pay $30,347 a year for water service, $4,020 or 15.3 percent, more than now. That assumes the farmer has a 2-inch meter and uses two acre-feet of water per acre per year.
A farmer with 200 irrigated acres would pay $150,351 for water service, $19,359 or 14.77 percent, more than now. That assumes the farmer has a 4-inch meter and uses two acre-feet per acre.
And if the same 200-acre farm had a 6-inch meter, the annual tab would increase to $155,353, $12,529 or 8.77 percent, more than today.