On a 5-3 vote, the San Diego City Council approved a series of water rate increases Tuesday totaling nearly 20% over the next two years, following a public hearing during which San Diegans largely urged the body to reject the hikes.
The first adjustment will be an increase of 5%, effective Dec. 1, 2023, followed by a 5.2% increase on July 1, 2024, and an increase of 8.7% effective Jan. 1, 2025. While ratepayers have previously seen smaller increases, Tuesday's rate adjustment is the first comprehensive jump in rates since 2015.
"This is a significant magnitude of a fee increase," said Councilmember 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."
The average monthly cost for single-family homes would climb from $81.07 to $93.55 in 2025 with the rate increases. The city's annual water system revenue will increase from $566 million to slightly more than $600 million once the increases are fully implemented.
San Diego imports 85-90% of all its water, which "will dramatically change when the full Pure Water Project comes online," according to a representative of the city's public utilities department. Pure Water is a phased, multi-year program intended to provide nearly half of San Diego's water supply locally by the end of 2035 by recycling sewer water. According to a city statement, it will use water purification technology to clean recycled water to produce safe, high-quality drinking water.
Councilmember 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.
Councilmember 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.
According to the public utilities department, the rate increase is needed to fund infrastructure projects such as Pure Water, pipelines, storage such as dams and the increasing costs of chemicals to treat water — up 154% since 2018. Additionally, even as San Diegans are using less water, the operating costs are unchanged as infrastructure must be maintained.
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," Councilmember 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-19 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."
