Thursday, April 2, 2009 | City Council members are increasingly skeptical of Mayor Jerry Sanders’ plan to reduce citywide water consumption based on residents’ historical usage.

Council President Ben Hueso, Councilwoman Donna Frye and Councilman Carl DeMaio expressed concern Thursday about the current proposal’s fairness. The City Council is scheduled to consider the plan later this month.

“If we have a policy that doesn’t distribute water fairly and we’re going to ask certain people to stop showering while we ask others to water their lawn less, that’s very unfair,” Hueso said. “We have to look at this policy again.”

In a Thursday memo to Jim Barrett, the city’s public utilities director, DeMaio cited coverage of the city’s misrepresentations about the Irvine Ranch Water District’s approach to water conservation and asked for a revised timeline for implementing such a plan.

Irvine Ranch developed water budgets for each of its customers based on the number of residents in each home and its lot size. City officials claimed Irvine Ranch needed eight to 12 years to implement its plan. The district took a year.

Frye said she plans to draft an alternative proposal that would not penalize residents who’ve already conserved if they don’t save more. She said she met Thursday with members of the mayor’s staff and asked for an analysis of several potential strategies.

“I’m trying to achieve an outcome that would make sense and that the people of San Diego could participate in and not feel that they were being punished for doing the right thing,” Frye said. “That is a message that has to be stopped immediately.”

While Sanders and city officials have touted their current proposal as fair to city residents, they’ve ruled out other strategies as unfair or impractical. But their grounds for those arguments are shaky, and they have at times misrepresented facts in order to justify their chosen plan.

Darren Pudgil, a Sanders spokesman, said late Thursday evening that the proposal was now being reviewed. “You’ve raised some good points,” he said. “They’re being looked at.”

As Sanders and city water officials have pitched their plan for citywide water cuts, they have repeatedly rejected increasing the price of water in order to effect conservation.

While some water districts in San Diego County are doing just that, city officials have said it wouldn’t work. They’ve instead offered a plan that proposes to cut residents’ water consumption based on their historic use. Those who’ve used the most will still be allowed to use the most — regardless of whether they’re doing so efficiently.

“All the literature I’ve read indicates that you’d have to double the price of water to get a 20 percent reduction in demand,” Alex Ruiz, the water department’s assistant director, said in a February interview. “I don’t think that’s where we need to be.”

The city has not actually cited any specific studies or literature as justification, however. In a report to the City Council, the Water Department solely refers to studies — with no backup materials or footnotes. Bill Harris, a Sanders spokesman, didn’t return calls seeking specifics.

A San Diego County Water Authority analysis from 2000 does back up the city’s stance. But a UCSD economist and a 2007 analysis by economists from Berkeley, Harvard and Yale suggest the city is understating price increases’ effect on demand. The team’s research found that doubling the price of water reduces demand 33 percent.

The research cites a meta-analysis of 124 estimates that put it higher: 38 percent in the short-term. The analysis concluded an even higher reduction in the long-run: 64 percent.

Richard Carson, a University of California, San Diego economist who didn’t participate in the research, said most studies conclude that boosting rates cut demand more than the city estimated.

“You could find an estimate that low but it would not be the typical estimate,” he said. “It would be a really pessimistic estimate.”

The mayor and city water officials have said that increasing the cost of water wouldn’t necessarily drive demand down. Citing unnamed industry research, the mayor’s proposal to City Council claims that “some customers may be willing to pay whatever the rate would be for using the amount of water they wish.”

Carson said that is a “nonsensical statement” with no basis in economics. At some price point, a gallon of water becomes so expensive that no one will buy it.

“If they’re willing to pay whatever the rate is, a responsible government goes out and buys water under that price,” Carson said. That would require the city’s wholesalers to buy pricier water from California farmers, he said, who would fallow their fields in exchange.

City officials have also warned that increasing rates threatens to make water so expensive that the poor cannot afford it. But other agencies throughout the state have structured rates so they do not impact low-income households, which typically use less water. Irvine Ranch increased rates on its most wasteful customers. They pay 940 percent more for their wasteful use than the lowest users pay. Revenue collected from wasteful users subsidizes lower rates for the most efficient customers.

Carson called the city’s argument a red herring and said well-reasoned price structures could actually help the poor. “The city is acting really stupid,” he said.

“Any notion that raising the price is going to hurt the poor people has a complete lack of imagination on how you do your pricing structure,” Carson said. “You want to make the poor people better off and lower their rate because they can’t cut back.”

The mayor’s proposal offered another reason why a shift in pricing wouldn’t work: Timing. A lengthy rates analysis would be needed, city water officials have said. Those officials have claimed that they only had six months to develop a strategy for handling mandatory cuts. They’ve known about the possibility, though, since at least September 2007.

The City Council must approve any water-cuts strategy, which the Water Department wants in place by July 1 to protect the city from penalties that would assessed if the city’s consumption exceeds what its wholesalers allow.

The council will have more analysis in hand when it considers proposals. Councilwoman Sherri Lightner asked the city’s independent budget analyst on Thursday for a detailed review of the options outlined in a state guidebook to water-cut strategies.

The guidebook, given to San Diego water officials in late 2007, warned that the plan they subsequently chose could cause “huge disparities” in water allocations among customers.

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