Now that the City Council has overwhelmingly voted to adopt Mayor Jerry Sander’s plan to fund critical water and wastewater upgrades citywide by hiking sewer and water rates, the debate over whether it was a smart, necessary or even an appropriate move continues.
Last week, the City Council voted 7 to 1 in favor for wastewater, 6 to 2 in favor for water, sanctioning the mayor’s new plan calling for San Diegans to pay progressively higher water and sewer rates over the next four years. Residential utility bills will rise about $27 - 35 percent - during that interval.
The impact on businesses, at issue during Council deliberations, is less certain and more variable, with smaller rate increases anticipated for them next year. Commercial and industrial rates are also expected to rise in subsequent years.
“I commend the City Council for adopting a plan that allows us to fix the water and wastewater systems,” said Sanders, noting the utility rate increase will be used to begin construction of overdue projects to repair and improve the city’s water and sewer infrastructure. “The package of improvements they approved will let us get back on track toward meeting our responsibilities and ensuring the safety and reliability of these systems into the future.”
Noting the city must begin construction projects soon on overhaul of its water and wastewater systems required by state and federal decrees, Sanders added: “The city has been forced to delay the projects necessary to meet our obligations under the Compliance Order and Consent Decree for too many years. The plan approved by the Council shows the city is committed to meeting these obligations and to moving forward with the critical projects required for these systems.”
Responding to the City Council’s favorable vote on the utility-rate increases, Michael Shames, executive director of the Utility Consumers Action Network (UCAN), a non-profit consumer watchdog group, stopped short of criticizing the council’s decision, while finding fault with the process by which it was derived.
“I have no idea whether, or how much, of this water increase is warranted,” said Shames. “The part that concerns me is that nobody else has a good idea as to whether all of the rate increase is necessary.”
Arguing the Council does not have the technical expertise, Shames pointed out they didn’t access an independent expert to justify the rate increase. “There’s no such thing as a truly independent auditor,” said Shames, “when you are choosing the auditor, and you are paying the bill, because that auditor who worked for you wants the repeat business. I challenge the city, in this case, to come up with an independent, informed auditor to determine that the process was sound, and the rate increase may be warranted. The city didn’t do that.”
Council President Scott Peters, whose First District includes La Jolla, stood by the Council’s decision on the rate increases. “There’s no doubt the work is absolutely necessary,” Peters said. “We had a sewer spill a day in 2000. We started replacing pipes at a faster rate and cleaning the entire (sewer) system. Since 2001, we’ve reduced sewer spills 83 percent, and beach closures 77 percent. That work has to continue.”
In testimony before the City Council on proposed water and sewer rate increases Feb. 26, Consumer Price Index researchers presented data contending the average single-family household will pay 30 percent more per gallon of water than the average business. Their data also suggested residential water rates will rise about 11 percent, much more than the increase for businesses, should the mayor’s plan be adopted.
Jim Boily, a retired La Jolla dentist, has been canvassing neighborhoods opposing the sewer and water infrastructure rate increase. “It’s just another boondoggle,” said Boily. “Since 2000, we have passed three rate increases that were supposed to go toward infrastructure (improvements). I think zero dollars have gone for infrastructure.”
Boily objected to the way rate increases were divided by the Council between residents and businesses. “The city on sewer rates was charging more to homeowners than to commercial and businesspeople, and that’s against the law,” he said.
Peters noted that, out of 600,000 public notices sent out citywide prior to the Council hearing on the proposed utility rate increases, only about 8,000 - 3 percent - drew protests. “We focused on making sure the rate was appropriate between residences and businesses,” Peters said. “The rate we’re going forward with has more to do with how much water you use, which is appropriate.”
Peters said the mayor’s independent Rate Oversight Committee made sure there was no raiding of the city’s water and sewer fund. “It’s still inappropriate to take water and sewer funds and use it for other purposes,” he said.
Peters added San Diego’s water and sewer rates are about average compared with those charged by other cities in San Diego County. “We’re right in the middle,” Peters said. “We’re at the end of the pipeline. It costs more to get water here, which is why it’s a little more expensive, and why conservation is so important.”
UCAN’s Shames charged the city with offering deceiving information about its water and sewer rate increases. “When anybody starts telling lies, or offering misleading information,” Shames said, “it usually means they’re hiding something. We know the notices that went out to the public in January about the rate increases were misleading. The city didn’t offer any kind of independent scrutiny, and they compounded it by rushing it (rate increases) through. I have serious reservations that the totality of the rate increases is warranted.”
Shames noted rate increases by utilities like San Diego Gas & Electric typically take months, not weeks, to properly analyze. The magnitude of the money involved with the water and sewer rate increases is another matter. Said Shames: “We’re not talking about $2 million here,” he said. “We’re talking about hundreds of millions.”