The Morning Report
San Diego news and info
you need to take on the day.

Tuesday, Feb. 27, 2007 | The San Diego City Council approved four years’ worth of rate hikes for water and sewer customers Monday, allowing the two utilities to raise additional money for construction projects the city is legally required to complete.

Average water rates will rise 35 percent over the next four years and sewer bills will increase 29 percent over the same time period under the plan, which Mayor Jerry Sanders has been rallying support for since initially pitching the idea more than a year ago.

The new fees are expected to generate an extra $440 million to help finance the city’s required sewer line replacements, water treatment plants upgrades and other costly improvements that supporters said would reduce sewage spills, pipe breaks and unhealthy drinking water. This new wave of rate increases is slated to be reflected in sewer bills by May and in water bills by July.

Passing the new rates proved to be a tough tightrope for Sanders to walk over the past year, as several groups, including his allies, expressed cynicism about the city’s past handling of water and sewer funds and the information that was disseminated to customers last month. The groups pushed for more scrutiny of proposals the mayor claims are essential to maintain the city’s pubic health.

“To not do so would put the city and ratepayers at risk,” Sanders said.

On the sewer rate hikes, the council voted 7-1 to approve Sanders’ proposal, with only Councilman Brian Maienschein dissenting, even though each council member expressed reluctance to OK new fees. The rate increases for water customers were approved 6-2, with Maienschein and Councilwoman Donna Frye voting no.

Driving the construction projects are mandates handed down by the California Department of Health Services and the U.S. Environmental Protection Agency. A tentative settlement between the EPA and environmentalists and the wastewater department requires the city to replace between 40 and 50 miles of sewer line annually. The state’s order will require the city to enhance its water cleansing processes to guard against the fatal parasite cryptosporidium.

But the seven hours of discussion over the rates was dominated by questions and criticisms from skeptical council members, think tanks and residents who said Sanders’ proposal was difficult to understand at best and disingenuous at worst.

“It was confusing, it was bland in a way that you don’t ever want to read it, and I don’t think it was done in good faith,” Councilman Tony Young said, referring to the notice that was sent to the city’s customers to inform them of the pending increase.

Ratepayers are entitled in the state constitution to block a fee increase if a majority of them file protests with the city, but less than 6,900 of the water and sewer systems’ 276,000 customers sent in objections to Sanders’ proposal, the City Clerk’s Office reported.

The Council on Fee Hikes

The increases to the city’s water and sewer rates passed easily though most members of the City Council expressed concern about the way the changes were presented to the public.


Scott
Peters

Voted Yes: “People understand these investments need to be made and they’re willing to pay for them.”


Kevin
Faulconer

Voted Yes: “The money doesn’t come from heaven … it comes from hard-working men and women and they want to know the money is being spent efficiently.”


Toni
Atkins

Voted Yes: “I do not want to be in a position of chasing our tails and running around to make emergency repairs.”


Tony
Young

Voted Yes: To the city’s staff: “I asked you to make it as simple as possible … and I don’t think you accomplished that.”


Brian
Maienschein

Voted No: “I do have concerns about these notice issues. … I don’t believe 99 percent of the people in my district could go through this and remotely have an idea of what any of this means to them and what they’re looking at one month down the road let alone eight years down the road.”


Donna
Frye

Voted No on Water Rate Increase, Yes on Sewer: “Until this city can figure out how to send out an accurate bill and not charge people over half a million dollars in additional revenue to do that, I won’t support this.”


Jim
Madaffer

Voted Yes: “If I can conclude anything, it’s that this city is suffering a crisis of confidence.”


Ben
Hueso

Voted Yes: “It’s a very difficult thing to raise rates. No one ever wants to do that. But this is something we have to do as we look forward to financing our infrastructure.”


Scott
Peters

Voted Yes: “People understand these investments need to be made and they’re willing to pay for them.”


Kevin
Faulconer

Voted Yes: “The money doesn’t come from heaven … it comes from hard-working men and women and they want to know the money is being spent efficiently.”


Toni
Atkins

Voted Yes: “I do not want to be in a position of chasing our tails and running around to make emergency repairs.”


Tony
Young

Voted Yes: To the city’s staff: “I asked you to make it as simple as possible … and I don’t think you accomplished that.”


Brian
Maienschein

Voted No: “I do have concerns about these notice issues. … I don’t believe 99 percent of the people in my district could go through this and remotely have an idea of what any of this means to them and what they’re looking at one month down the road let alone eight years down the road.”


Donna
Frye

Voted No on Water Rate Increase, Yes on Sewer: “Until this city can figure out how to send out an accurate bill and not charge people over half a million dollars in additional revenue to do that, I won’t support this.”


Jim
Madaffer

Voted Yes: “If I can conclude anything, it’s that this city is suffering a crisis of confidence.”


Ben
Hueso

Voted Yes: “It’s a very difficult thing to raise rates. No one ever wants to do that. But this is something we have to do as we look forward to financing our infrastructure.”


Scott
Peters

Voted Yes: “People understand these investments need to be made and they’re willing to pay for them.”


Kevin
Faulconer

Voted Yes: “The money doesn’t come from heaven … it comes from hard-working men and women and they want to know the money is being spent efficiently.”


Toni
Atkins

Voted Yes: “I do not want to be in a position of chasing our tails and running around to make emergency repairs.”


Tony
Young

Voted Yes: To the city’s staff: “I asked you to make it as simple as possible … and I don’t think you accomplished that.”


Brian
Maienschein

Voted No: “I do have concerns about these notice issues. … I don’t believe 99 percent of the people in my district could go through this and remotely have an idea of what any of this means to them and what they’re looking at one month down the road let alone eight years down the road.”


Donna
Frye

Voted No on Water Rate Increase, Yes on Sewer: “Until this city can figure out how to send out an accurate bill and not charge people over half a million dollars in additional revenue to do that, I won’t support this.”


Jim
Madaffer

Voted Yes: “If I can conclude anything, it’s that this city is suffering a crisis of confidence.”


Ben
Hueso

Voted Yes: “It’s a very difficult thing to raise rates. No one ever wants to do that. But this is something we have to do as we look forward to financing our infrastructure.”

The mayor was also accused of championing fee raises that resembled new taxes despite Sanders’ campaign pledge that he wouldn’t raise taxes. “He was not honest,” Talmadge resident Kyotco Fujiwara told the council. In addition, opponents said the city should downsize its payroll costs, such as its pension and retiree health expenses, before rates are raised. They pointed out that the fee increase would pay for projects that were supposed to have already been completed but never were.

“We did not directly cause these problems and I don’t know why the city wants to make us bear the burden,” East Village resident Charles Heisman told the council.

Different types of users will see their monthly bills increase differently. In a typical single-family home, for instance, an $80 bill for water and sewer services will rise by $25 by 2011.

Local groups that studied Sanders’ proposal pushed to mold it since the mayor laid out his plans in November. The San Diego County Taxpayers Association and San Diego Regional Chamber of Commerce endorsed the rate hikes after Sanders agreed to empanel an independent committee that would monitor the city’s use of the new funds. That committee was not formed Monday, but the Mayor’s Office said it plans on creating the board next month.

The groups’ support was also conditioned that any savings the city realizes from streamlining the water and wastewater departments is stored away in a reserve account that would offset any future rate hikes. Sanders said he plans on laying off 63 workers from the Water Department and 140 employees from the wastewater agency. Additionally, he has also hinted that he would favor privatizing either agency if it meant significant savings for the customers.

Other groups that analyzed the increase chose to oppose it. The tax-adverse Performance Institute opposed the measure, insisting that rates not be increased until the city can control its payroll costs and institute better monitor the management of its utilities.

The Center on Policy Initiatives, a pro-labor research organization, said Sanders’ rate plan unfairly charged average residents 30 percent per gallon more than average businesses. Murtaza Bazmusa, CPI’s research and policy director, acknowledged that a resident and an industrial business that used 10,000 gallons would be charged similarly, but he noted that a typical business buys much more than that amount. He said a business does not get charged more if its consumption ramps up, but that if a consumer were to purchase an inordinate amount that is more typical of an industrial user, the resident’s rates would become steeper than the company’s.

The city should disclose this as a subsidy to business, Baxamusa said. “If there’s a volume discount for businesses, then tell us what it is,” he said.

Sanders, flanked by business leaders at a morning press conference, told reporters that his proposal was not a “bailout for business.” He hinted that the late arrival of CPI’s assertions, which were first lodged Friday, showed that the group was desperate to discredit the mayor. “In absence of the facts, it’s always easier to go to the conspiracy theory,” Sanders said.

The Utility Consumers Action Network, which is currently settling a lawsuit over allegations that residents subsidized industrial users of the wastewater system earlier this decade, voiced concerns that were similar to CPI’s last month. After pledging to respond to UCAN’s concerns over the rate structure and the fashion in which it was presented to the public, the Mayor’s Office has not yet issued a retort.

Water officials referred, during Monday’s meeting, to another round of fee increases that will take place later this year, after the city’s wholesalers at the San Diego County Water Authority and the Los Angeles-based Metropolitan Water District of Southern California pass their rate increases downstream to the city.

Please contact Evan McLaughlin directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

Leave a comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.