Public Hearing Set For San Diego's Proposed Water Rate Hikes

MAUREEN CAVANAUGH: This is KPBS Midday Edition, I am Maureen Cavanaugh. Our top story today, this week San Diego city residents will get a chance to speak out about proposed waterway. A public hearing is scheduled for Thursday. An issue are two's consecutive years of water rate heights of more than 7%. The city's is the assist the increase is needed. The combined hikes will increase the typical water bill by more than eighty dollars a year. Would like to introduce my guess Brent Eidson and Donald Kelly. Welcome to the program. Now anyone who has lived in San Diego the last decade as seawater rates increase sharpley. Where is this coming from? BRENT EIDSON: The pressure is coming from water sales. We buy ñ 90% of our waters into her our customers comes from out of the area. These waters are getting more expensive and cost of being cast out of our costs are being passed out. The sources water of our being more difficult to obtain. There are lots of pressure of the sacrament of the Delta. Was also infrastructure challenges. We have to move the water all the way from Northern California and for that Colorado River to the east. All of those charges get wrapped up into the actual cost of water. MAUREEN CAVANAUGH: How if you determine the amount of these rate hikes? BRENT EIDSON: If the cost of service study where we hired a consultant to look at our financial pistol pitcher for the font. It determined that we could no longer sustain a current rates in the to make ñ pay the cost that we have. We did look back and we know that rates of the going up for years. The city of San Diego had invested inefficiencies in our operations. We did not have to raise rates in 2012 and 2013. We're the situation now we cannot continue to have financial health without this. MAUREEN CAVANAUGH: Will rate hikes will be be used to pay for water or on the other across? BRENT EIDSON: We simply pay for the cost of the water. MAUREEN CAVANAUGH: Is any of it retroactive? BRENT EIDSON: Yes but I would not call it retroactive. The rates were increased in 2012 and 2013. That was the new cost of water. Those costs have been compounding over the years. It's not dollar per dollar, we did make efficiencies and savings. MAUREEN CAVANAUGH: Donald, what is the position on these water rate hikes? DONALD KELLY: The city to city water department needs to have enough money to operate. Have enough money to make sure the water gets delivered. One thing that is concerned this is that the amount of increase be used is also be used to supply or support index service ratio which means that they are trying to extract from a 7.25 increase is not be just used for buying water but for reducing debt for San Diego water. It is being sold as a dollar per dollar. One of the things of the city says is that the city absorbs $35 million a water increases. The way that is worded is that it seems that the city says Berger to absorb the cost, but the question recently became of his rather not there is retroactivity to the rate increase. With the city is claiming is that they are recover prior years. J it's not that they are getting dollar for dollar, increases for water purchase going forward, there also charging for past costs. MAUREEN CAVANAUGH: Is the city of San Diego tried use the increase money to the that debt servicing bill? BRENT EIDSON: We're using the rating trades to make sure that we have sufficient funding. Including legal obligations to cover our debts. It is one of the explanations that we are giving to the public and counsel. That was the driving force for time this behind this rate increase. Rethink that the new cost of water does this, it based on the rates that we're increasing your in order for our fun to be whole and healthy we need this rate decreased. MAUREEN CAVANAUGH: Donald what you hearing about this rate increase. Are you calling it upset or with questions? DONALD KELLY: I have heard from some of our members. They are upset with the cost of water. The primary purpose of this complaint is that San Diego is charging very much for too much. They want to know why the cost is going up so high. The city of San Diego is indicating that the rates of increased since 2007. By about 125%. We're trying ñ the main question is why is it going up so high, and why is the city of San Diego continued to purchase water from the water authority. I actually understand that San Diego needs to have water supply, I understand the city of said you has to pay what is charged to the to purchase the water. I understand that the water is a is provided for the citizens and the need to pay for that. The one of the things that are members are concerned about is that because the rate increases have been going up so high, when is it going to stop? The problem with the city of San Diego is the rates for the County water Authority and the Metropolitan water District have been going up more in the future because infrastructure costs going alike to given the fact that we're continuing to pay increases in water, and increases of water prices for imported water, the question is what is the city doing about increasing supply? MAUREEN CAVANAUGH: Can the city do anything about increasing water supply? BRENT EIDSON: We are. We can and we are people you have robust program right now to determine whether or not we can adequately and safely treat our wastewater to the purified level and then reintroduce that to the tricky supply. Technologically we it's feasible and fifty-six. We're the middle of doing more studies on seeing how we can provide a level of treatment that is expensive enough to supply our residents to where we have our own local supply of water. MAUREEN CAVANAUGH: The beginning process of that and desalination that we're expecting to get, in the lead up to that aren't they going to cost us more in the first two years to try to get these plants and additional sources online? BRENT EIDSON: Let me talk about desalination first. It is expected to be a higher cost than we're paying now for imported water. The numbers have not been released yet. We will not know the final cost but is it to stated to be higher. With the reuse programs project it is more interesting. There are opportunities there on cost avoidance. We are still studying what those final costs on global reuse will be. I'm not now position where I can guarantee that anything will be lower or higher today. MAUREEN CAVANAUGH: Donald Kelly, you mentioned where the cost of water has gone up since about 125%. Has there been any exploration as to ways that the city is going to continue to increase the cost of water over the years? Is there any way that we can mitigate those increases, and perhaps by conservation measures and different pricing structure with more tears involved for higher water users, etc.? DONALD KELLY: We can. They can encourage conservation. Purpose of conservation is to increase supply I using US Park it does not cost the city of San Diego anything to purchase less water. A cost of less money to purchase this water. The point of conversation the point of this ñ is encouraging conservation to appoint by a adding tiers as well. The more we can serve them less we have to buy the cheaper water will become. But it is also my understanding that they commit oversight committee actually questioned whether or not they could study the water rate structure appear Apparently the city of Davis has a new water rate structure that significantly courage is an conservation where if you save money ñ if you save a substantial amount of water you will save a substantial amount of money. I want to see if they've actually studied that and if they are considering it now. I very happy that the fourth tier is here now to encourage conservation presently, but right now if you save it upset a substantial amount of water you do not save a lot of money. MAUREEN CAVANAUGH: Says or anything like that court to save water to save money? BRENT EIDSON: There are a couple things out now. Pricing versus conservation. This is relatively new and we're evaluating whether the legal challenges to it. 2016 is the next time we're going to do a cost of service study. It would be appropriate to identify at that time the additional pricing structure that works. Not making any promises that the city of Davis is the right one, but we are evaluating this. MAUREEN CAVANAUGH: I am surprised, but we're almost out of time. Let me focus last few questions on this public hearing. How can repairs anyone wants to take part in this year? BRENT EIDSON: It's a public hearing beginning at 10 AM at City Hall we encourage the public to come and speak about the proposal. You should have received in the mail up top eighteen notice of Public hearing. It also gives you the opportunity to purchase this rate hike. ñ Protest. If we receive more than 50% protest we amongst our water customers. If those members that have mailed in the protest and saying they don't want that water increased and the city Council cannot put on it. See what if that were to happen what we to do? BRENT EIDSON: We have to regroup and promote with a new proposal. As Mister Kelly these costs are trickling down. These are charges that we have to maintain one way or another. MAUREEN CAVANAUGH: Witness the city Council expected to take a final total mess? BRENT EIDSON: This Thursday. MAUREEN CAVANAUGH: Okay, I have been speaking with Brent Eidson and Donald Kelly.