Monday, Oct. 5, 2009 | On what had been dubbed “Water Action Day” at City Council, the real action happened down in the lobby of City Hall.

There, after a two-hour council discussion upstairs, Lani Lutar, the president and CEO of the San Diego County Taxpayers Association, voiced frustrations to two city water officials about their conflicting stories.

Lutar’s beef: That the city’s Water Department wasn’t being straightforward about its intentions to consider a water-rate structure designed to reward conservation and penalize excessive use.

It wouldn’t be the first time. Earlier this year, those same officials misrepresented the challenges of implementing such a plan, which is used in the Irvine Ranch Water District in Orange County. Those officials used their misrepresentations to justify rejecting the idea in February, saying that Irvine Ranch had taken as much as 12 years to implement its plan, which tells residents how much water they can use and charges them higher rates if they exceed their limit.

But it hadn’t taken Irvine Ranch 12 years to put its plan in place. It took six months. And the district hadn’t gone door-to-door to survey properties, as city officials claimed.

Those misrepresentations were made as San Diego moved to put a plan in place to reduce city-wide water consumption.

Now, as the discussion about water consumption and the Irvine Ranch model moves to the City Council, the city again faces the same problem. Lutar said officials from the city’s Water Department, who answer to Mayor Jerry Sanders, haven’t been straight with her and other business leaders.

“Their reasons change by the minute,” Lutar said.

Lutar said Alex Ruiz, the Water Department’s deputy director, and Rod Greek, another water official, led business leaders, large water users and lobbyists to believe that the city was seriously pursuing the Irvine Ranch model. Lutar said at meetings in August and September, the water officials indicated they were open to the idea and having a consultant study it.

Ruiz made the same point in a February interview.

But talking to the council Monday, Jim Barrett, the city’s top water official, said the city was not working on the Irvine Ranch approach. “Not right now sir,” he told Council President Ben Hueso, citing the potential legal risk of adopting the strategy.

Irvine Ranch, which serves 330,000 people in Irvine and parts of Tustin and Newport Beach, adopted its strategy in the face of the major drought that struck Southern California in the early 1990s. In the district, each home’s water budget is based on site-specific data: How many people live in a house and how large the property’s landscaping is.

Those who go above their allocation pay higher rates the more they exceed their allowed use.

A majority of City Council members like the idea, but city water officials have resisted it, citing a litany of reasons — many of which have been disproven or that Irvine Ranch representatives have said are incorrect.

Lutar said in meetings, city officials acknowledged the City Council consensus around the concept. Council members again voiced that consensus Monday, referring the idea to committee for deeper discussion. Slideshows from those meetings highlighted the concept as being the most efficient water-rate structure available to the city.

On Monday, Barrett said he thought the Irvine Ranch approach — distinct for its steeply tiered rates that charge excessive users as much as eight times more than the lowest users — could potentially face a “significant legal challenge.”

“It hasn’t been challenged in the courts,” Barrett said. “We have to be careful of the risks we assume when we put a rate in place.”

But Barrett doesn’t have any legal opinions saying so. Paul Prather, a deputy city attorney, told the council his office had not conducted any legal analysis examining the litigation potential. And the state Legislature has taken steps to ensure that approaches like Irvine Ranch’s are legal, said Darryl Miller, a longtime Irvine Ranch board member who addressed the council Monday.

“Our attorneys have looked at this carefully,” Miller told the council. “There is a real basis for any water district wanting to pursue tiered rates.”

Lutar said water officials have also changed their story about the nuances of how such a structure could work in San Diego. And she let them know it in the lobby of City Hall.

In an e-mailed statement, Ruiz didn’t address Lutar’s criticism. He reiterated concerns about litigation and said that if that could be overcome, moving to an Irvine Ranch-like approach would happen alongside a study scheduled to be completed in a year. Ruiz said the city isn’t moving forward on it because no discussion has happened about its cost, its implications for the city’s billing system or its data requirements.

She said she felt insulted that Sanders’ office had asked for input it didn’t seem to want. Lutar said she isn’t convinced that the Irvine Ranch approach is the best option for the city. But she said she can’t get a consistent explanation from the city about why it wouldn’t be.

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