The city of San Diego this week will begin sending out notices of a Nov. 17 City Council vote on increasing water rates.
City staff are proposing five incremental hikes in water rates, beginning with a 9.8 percent increase in January 2016. The final increase, in July 2019, would raise water rates to about 41 percent above their current levels.
Staff say there are several reasons behind the need for a rate increase. First, the San Diego County Water Authority—where the city of San Diego gets most of its water supply—has increased its own rates recently and is planning further hikes in the future. Water purchases make up the lion’s share of the city’s water budget, at 36.1 percent, or about $2.3 million.
Secondly, the city’s aging water infrastructure has required a number of capital improvement projects. Those make up about 19.5 percent of the current budget, or about $1.2 million.
A third, and perhaps surprising, reason for the rate increase is conservation. This summer San Diego was using 26 percent less water than in 2013, far beyond the state-mandated target of 16 percent.
Most of the city’s water costs are fixed, but the majority of its revenue comes from water sales, which aren't fixed. Brent Eidson, deputy director of external affairs for the San Diego Public Utilities Department, said that model incentivizes conservation. A relatively small base fee and higher water rates mean a big reduction in water use can make an even bigger reduction in a customer's water bill.
Eidson said staff are planning to review the city’s water rate model and present a study to the City Council by June 2017. In the meantime, he said, the rate increase is an unfortunate necessity.
“We’re not going to pretend that anybody likes to see their water rates go up,” he said. “(But) if the council does not approve the rate increases, then the city would be in a position where we would not have the revenue necessary to purchase the water we need to serve to our customers.”
The notices to be mailed this week are required by Proposition 218, passed by California voters in 1996, which regulates local and regional government finance. The city aims to have them all delivered by Oct. 3, just in time for the 45-day deadline mandated by the law.
San Diego water customers have the chance to protest the rate increases by sending in a pre-printed form to the City Clerk. Eidson is also leading a series of community presentations taking place throughout San Diego from now until Nov. 5.
