An approved increase in wastewater rates will allow the City of San Diego to upgrade its sewer system, advance the Pure Water program and continue high level wastewater collection and treatment services.
Under the plan approved today by the San Diego City Council, wastewater rates will increase 5% beginning in January 2022. Additionally, there will be increases of up to 4% in both 2023 and 2024 and up to 3% in 2025.
The City Council also approved a pass-through charge from the San Diego County Water Authority to pay for an increase in the cost of imported water. Water rates are projected to increase up to 3% beginning in January 2022.
The City of San Diego’s Public Utilities Department is dedicated to providing reliable water and wastewater services in a cost-effective manner while protecting our water resources and the public’s health.
The Public Utilities Department does not generate a profit and is not supported by the City’s General Fund. The City’s rate structure must account for and set rates to reflect the full needs of providing water and wastewater services.
Public Utilities strives to keep costs low. However, some costs, such as the price of purchasing water, are beyond the department’s control. The City purchases as much as 85% to 90% of all its drinking water. When the suppliers increase the cost of this water, the City must pay more.
In addition, the City must finance routine rehabilitation and replacement of aging infrastructure to ensure Public Utilities is providing reliable service that is in compliance with local, state and federal regulations.
The City issues debt to pay for these improvements so that the cost of these improvements is paid by the rate payers over the useful life of the infrastructure.
Last year, the City conducted a cost of service study on wastewater (sewer) services to evaluate future revenue requirements. The study looked at the projected capital costs, operating costs, debt costs and the overall financial stability of the wastewater utility through fiscal year 2025. Wastewater development capacity fees were also studied to assess the impact of new development connecting to the City’s wastewater system. Wastewater rates have not been adjusted for over 10 years.
The study found that if the City’s sewer rates remain unchanged, there will not be enough revenue to provide necessary wastewater and recycled water services between fiscal years 2022 and 2025. Wastewater rates, which include recycled water, were developed so that the charges proportionately recovered the projected costs to serve customers. Wastewater development capacity fees were updated to address the cost of existing available capacity as well as the value of future capacity projects.