WATER RATES WILL RISE 16% IN SAN DIEGO NEXT YEAR
Reprinted from the San Diego Tribune (November 17, 2015)
Water bills will soar 16 percent in San Diego next year under rate increases the City Council approved 7-2 on Tuesday after nearly five hours of spirited testimony at City Hall.
Opponents said the hikes are too sharp and sudden, will impact low-income residents too severely and send the wrong message to many thousands of San Diegans who have dramatically reduced water use this year because of an ongoing drought.
Supporters, including a broad coalition of business and environmental groups, said such large hikes — 9.8 percent in January and 6.4 percent in July — are a necessary evil that will actually save ratepayers in the long run by helping fund projects that will boost San Diego’s water independence.
Those include a regional desalination plant in Carlsbad and the city’s $3.5 billion plan to recycle treated sewage into drinking water.
Those projects, combined with projected increases in the cost of imported water, will require additional planned San Diego rate hikes of 6.4 percent in July 2017, 5 percent in July 2018 and 7 percent in July 2019.
That would be a 40 percent compounded rate hike within four years, but the Utilities Department could cancel or shrink some of those future increases if circumstances change, such as the drought ending.
The council also increased rates for irrigation water 117 percent.
Council President Sherri Lightner said the hikes put San Diego on course to have a more financially sound and reliable water system for decades to come.
“We need to take control of our water destiny,” she said. “This is our opportunity to responsibly plan for our future. We know that developing local water supplies is costly, but it’s much more expensive to continue to rely so heavily on imported water.”
Imported water, which accounts for more than 85 percent of the city’s water supply, has more than doubled in price since 2005, with the city passing most of those cost hikes on to ratepayers.
Councilman David Alvarez, who joined with Councilman Scott Sherman in voting against the increases, said supporters have exaggerated the connection between the rate hikes and the sewage recycling program, which the city has dubbed “Pure Water San Diego.”
He stressed that less than one-twentieth of the revenue generated by the rate hikes over the next five years will pay for Pure Water infrastructure.
“To say that if we don’t do this we will not have Pure Water is just false,” he said.
Ironically, conservation played a role in the increases being so large. Reduced water usage by San Diegans this year cost the Utilities Department about $73 million in revenue, city officials said. While that lowered costs for imported water, it left the city with less money than expected to make debt payments and fund ongoing maintenance and capital improvements.
The increases approved are 1 percent less than the city’s Utilities Department and Mayor Kevin Faulconer requested. Council members said they wanted to somewhat soften the burden on ratepayers, suggesting some planned capital projects could be slightly delayed.
In addition, concerns about sticker shock for residents who are poor or living on fixed incomes prompted the council to include in its approval that city officials accelerate exploration of a subsidy program.
Channelle Hawken of the San Diego Regional Chamber of Commerce said the hikes San Diego’s water rates are in line with most other cities.
Environmental groups said delaying the Pure Water program would force the city to spend as much as $2 billion upgrading the Pt Loma Wastewater Treatment Plant.
If a large percentage of the sewage treated by the plant isn’t diverted to a recycling system and turned into clean drinking water, the plant will need to improve its treatment capabilities to comply with federal guidelines. That would cost almost as much as Pure Water and the city wouldn’t see an increase in its local water supply, they said.
Mayor Faulconer said not approving the hikes would have put the city at risk.
“Today’s vote really is a critical vote for the future of our San Diego water supply,” he said. “Failure to act today doesn’t make the problem go away, it only makes it worse.”
The council approved all of the 40 percent compounded rate hikes through 2019 on Tuesday, making no further approvals necessary.
But Utilities Director Halla Razak said she planned to hold public hearings and get the council’s consent for the increases beyond July 2016.