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San Diego City Council approves water rate hikes of nearly 19% over next 15 months

The average family monthly bill will jump from $81.06 to $93.67 come December, and then $100.75 in early 2025.

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In a 5-3 vote Tuesday, the San Diego City Council approved a series of significant water rate hikes for city residents.

Rates will increase 10.2% on Dec. 1, 2023, and then 8.7% more on Jan. 1, 2025. This means the average family monthly bill will jump from $81.06 to $93.67 come December, and then $100.75 in early 2025.

The city argued it would not have enough revenue to provide necessary water services for fiscal years 2024 - 2025 if rates weren't increased, citing an independent rate consultant contracted by the city last year.

Results of Tuesday's vote are as follows:

  • LaCava (District 1) – Yes
  • Campbell (District 2) – Yes
  • Whitburn (District 3) – Yes
  • Montgomery-Steppe (District 4) – NO
  • Von Wilpert (District 5) – No
  • Lee (District 6) – Yes
  • Campillo (District 7) – Yes
  • Moreno (District 8) – No
  • Elo-Rivera (District 9) – Absent

Where does the money go? According to the city, 59% is expected to go toward the purchase of imported water and 41% will pay for maintenance, upgrades and debt services for the city’s water system. 

This includes an investment in the pure-water program, which is a landmark recycling program that will reduce the need for the city to purchase imported water. They’re aiming for 2035 when the pure-water program will supply half of San Diego's water supply. 

Additionally, the city is seeking to pass through any rate increase imposed by the San Diego County Water Authority. Keep in mind that San Diego's Public Utilities Department does not generate a profit and is not supported by the city’s general fund. 

"This is a significant magnitude of a fee increase," said Councilman Kent Lee. "I think it was pointed out earlier that we have not had a rate increase of this magnitude for several years and it will have a significant impact on residents."

Councilwoman Vivian Moreno opposed the rate increase, expressing frustration that in recent months, water bills from the city had been held back while it fixed a billing issue, only for ratepayers to later receive bills for thousands of dollars with accrued penalties.

She said she "no longer (has) confidence" that the Public Utilities Department can serve customers effectively and with clear communications.

Councilwoman Marni von Wilpert said hold times in contacting PUD's customer service line were unacceptable. A staffer from her office was on hold for 77 minutes before receiving assistance, she said.

Moreno, von Wilpert and Monica Montgomery Steppe all voted against the rate hikes.

Despite the stated need, dozens of residents asked the city to reject the increase, with some council members sharing their concerns.

"The frustration in this room is palpable," Councilman Stephen Whitburn said before addressing Juan Guerreiro, director of PUD. "Why should we have hope that the situation around the hold times and the bill delays is going to get resolved?"

Ultimately, Whitburn said the need for water infrastructure funding outweighed other concerns and moved to pass the increase.

"I approve the staff recommendation but want to make sure we are doing everything we can to help people with their bills," Whitburn said. "These rate increases are going to pinch but we need to continue to have quality water."

According to the PUD, San Diego's average monthly water bill is below the average for water agencies in the region -- which is around $95 a month -- and will continue to be after the rate increase. However, California has higher than average water prices and San Diegans in particular can expect to pay nearly double the national average water bill.

Additionally, San Diego pays the highest rate in the nation for electricity and the average cost of a home in the county surpassed $1 million in August. San Diegans have received nearly $30 million in COVID arrearage for water bills and the city has applied for $40 million more.

In June, the San Diego County Water Authority Board of Directors voted to increase wholesale water rates by 9.5% for 2024.

Citing "extraordinary inflationary pressures and depressed water sales," the board said the proposals are a way to manage cost increases while still protecting ratepayers, ensuring water reliability and maintaining the authority's credit ratings.

According to the agency, while it sets rates annually to address changing conditions, the Water Authority's budgets span two fiscal years. The recommended $1.8 billion budget for fiscal years 2024 and 2025 is up 5% from the current budget "due to higher costs for water, treatment and infrastructure maintenance."

Historically, SDCWA increases water rates annually, based on costs for infrastructure, operations, maintenance and water purchases from the Metropolitan Water District of Southern California.

The increased costs are then passed through by SDCWA to the member agencies that purchase water from it, including the city of San Diego. These increased costs are known as "pass-throughs."

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