San Diego’s main water seller OK’d a less-doomy price increase than the region was expecting, setting it at 14 percent on Thursday.
To make that work, the San Diego County Water Authority will have to find $2 million it can cut from its budget and delay some anti-earthquake-related upgrades to its biggest aqueducts. Those cuts save ratepayers from an anticipated 18 percent beginning January 1. But 14 percent is still the largest annual rate increase on the wholesale price of San Diego water since 2011, Water Authority records show.
Now each of San Diego’s 22 separate water districts will have to figure out how to shoulder that cost or pass it onto customers, depending on the health of their own budgets.
Those cuts and delays were the request of the city of San Diego, the Water Authority’s biggest and therefore most powerful customer on its governing board. At Mayor Todd Gloria’s insistence, the city’s been pushing the Water Authority to tighten its belt as San Diego also faces some future massive rate increases of its own to support a multi-billion wastewater-to-drinking water recycling project that’s currently under construction.
Gloria attributed the win to the “effective leadership” of his city reps in a press release Thursday “who persuaded Water Authority staff to find cost-saving efficiencies and further reduce the necessary increase.”
The Water Authority is also banking on a recently-received $19.4 million federal grant (money they won’t have to pay back) which helped further lower the expected rate increase.
Water Authority General Manager Dan Denham told the city it would be tough to find $2 million more in cuts after the budgetary fat-trimming that he said his staff already did this budget cycle. And in a letter to the board, Denham warned that San Diego’s water system could experience failures if the region didn’t invest in keeping all these pipelines in ship-shape.
But Matt Vespi, the city of San Diego’s chief financial officer and one of 10 San Diego Water Authority board members, made the motion to add the cuts anyway.
Eleven percent of that rate increase, the Water Authority said in a press release, are costs they can’t control – like the cost of purchasing and delivering Colorado River and northern California mountain water to the region from the Metropolitan Water District of Southern California and a contract to buy very expensive desalted ocean water from a plant in Carlsbad.
The agency also blamed the divorcing of two water purchasers in Fallbrook and Rainbow that left the Water Authority after much ado in order to buy cheaper water from another water seller.
The Water Authority’s financial staff warned the board that credit rating agencies were starting to probe the agency’s apparent financial woes, threatening the low interest rates they can maintain on the over $2 billion worth of debt yet to be paid off for a bonanza in water supply spending beginning in the 1990s.
delay some anti-earthquake-related upgrades to its biggest aqueducts.
The absolute wrong move. Toilet water conversion is 10 years away. That’s the nonsense that should have stopped. Thanks Toad.
The cost of living in California is getting more expensive every year and yet the Sac Politicians keeps importing more people to the State who cannot afford to live here. No need to worry about an earthquake when the reckless behavior out of Sac is much worse.
I want to thank Todd for saving me money to pay for his 1% sales tax increase and his upcoming trash fees. I can always count on you to raid my pocket in various ways so I don’t notice while you pursue negative land deals.