San Juan Capistrano residents and business owners will have to wait another month to find out if their water bills will see steep hikes after leaders of the San Margarita Water District said they needed more time to look at a potential price hike. 

Portions of water bills could increase by over 700%, according to proposals from the district officials.

Following fierce community pushback, water board members delayed those proposed increases at their Wednesday meeting. 

For roughly two hours, residents and business owners lambasted board members during public comment over the proposed hikes.

The Shea Center, a nonprofit dedicated to assisting disabled people with horse therapy, led much of the pushback, pointing out how their water bills were set to increase over $30,000 a year under the proposed rates, mostly due to their fire lines. 

“This current rate study is quantitatively unfair and inequitable,” Dana Butler, the center’s executive director, told board members Wednesday. 

“I ask you as leadership to please do better.”

[Read: San Juan Capistrano Businesses Shocked Over Staggering Proposed Water Bill Hike]

District staff said immediate rate hikes are needed to cover the water district’s repair bills. 

They say San Juan Capistrano – the former agency responsible for the area’s water system –  failed to properly maintain the infrastructure before the district took over in Nov. 2021.

They also noted the city’s water bills have not increased since 2018, despite the increasing cost for services.  

“The proposed rate adjustments are critical to recover increases in operating costs and fund significant capital investment needs,” staff wrote in their report. “Customer rate increases are necessary to address the impacts of deferred system infrastructure investment, meet increasing operating costs, and make substantial investments in aging system infrastructure.” 

While residential neighborhoods could see up to a 34% increase, businesses are projected to see parts of their bill increase as much as 1,200%. 

To review the district’s analysis of which businesses will be most impacted, click here

The main increase is coming to buildings with fire suppression lines, which in some cases will cost up to eight times more every month. 

Orange County Supervisor Katrina Foley criticized the district for failing to be transparent with residents, and said they needed to find another way to repair the system that doesn’t cause such steep increases. 

“I don’t think right now is the time for increasing rates,” Foley told water board members. “I’m concerned about the transparency and the information that flowed out to the community and the timeliness of that.” 

Every member of the Santa Margarita Water District Board of Directors pledged residents they would find a solution to the problem, with some apologizing for a failure to communicate with the public upfront. 

“I’m getting more and more angry,” said board member Laura Freese, who used to sit on the San Juan Capistrano City Council. “I felt the frustration of watching other city councilmen vote down helping our infrastructure, that’s why we’re in the pickle we’re in now.”

She also brought up how it wasn’t made clear to the public what increases were coming. 

“I’m also angry this wasn’t brought to our attention earlier,” Freese said. “In the executive summary, there’s no mention of the enormous increases, everything’s nice and legal, tied up pretty with a bow.” 

It remains unclear what the future rate structure could look like, but board members pledged to look at potentially throwing out their existing rate study and getting a new one, along with studying a citizen’s advisory committee to get more of a say in the process. 

“I’m ready to ask for a new rate study based on guiding principles that have been articulated,” said water board member Charles Gibson.  

However, any delays could end up costing the district millions of dollars, with staff projecting a new rate study could take another year if they start from scratch. 

“You have to take that into consideration,” Gibson said. “It’s yet another hurdle we’re going to have to cross.” 

The next discussion on the issue won’t come until August. 

“There’s no tougher form of government than local government,” said board president Frank Ury. “But at the end of the day our job is to come up with solutions to make sure we fill the holes … we’re doing this with an open mind.”

Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at or on Twitter @NBiesiada.


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