Clean Water Advocacy - Newsroom - NACWA in the News
San Diegans Pay More Than People in Other Big Cities
By Terry Rodgers
UNION-TRIBUNE STAFF WRITER
February 25, 2007
SAN DIEGO – San Diego has a reputation for operating on the cheap.
No other city in Southern California offers its citizenry free curbside garbage service and free beach parking along its entire coastline.
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In the past 29 years, San Diego's voters have approved only a single tax increase – a modest one at that.
But the city of freebies and fiscal conservatism hasn't been able to keep a lid on its water and sewer rates.
The typical San Diego resident paid a combined monthly water and sewer bill of $109.44 in 2005. That's the eighth most expensive price among the nation's 50 largest cities, according to a study by the private consulting firm Black & Veatch.
Costs stemming from San Diego's geography, city leaders' political choices and City Hall's controversial accounting practices have contributed to rising water and sewer fees during the past decade.
The rates will spiral even higher due to Mayor Jerry Sanders' plan to increase them for the next four years. The City Council is scheduled to discuss his proposal tomorrow.
Looking at the long term, water and sewer costs are widely expected to surge for at least a decade because lack of upkeep has resulted in a critical need for new pipes and modern treatment plants.
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Historically, geography makes it expensive for San Diego to obtain water. The city's local sources of water – rainfall, reservoirs and underground aquifers – are barely enough to support 100,000 people. San Diego has to get water that's transported from Northern California and the Colorado River.
This year, San Diego's water department will spend an estimated $120 million – about one-third of its entire annual budget – to buy imported water.
In contrast, other cities have saved money by relying at least partly on nearby sources of water. For example, San Francisco has the Sierra Nevada and Los Angeles has the Owens River Valley.
But Mother Nature isn't the only force behind San Diego's ballooning water costs.
Fearing the wrath of voters over the years, the city's elected officials chose to keep water rates down despite a growing list of system deficiencies.
From 1987 to 1997, the city boosted rates solely to offset increases in the cost of buying wholesale water from the San Diego County Water Authority, according to a recent analysis by the City Attorney's Office.
“Water rates were never increased to fund the water system's infrastructure until the (state and federal governments) forced the issue upon the City Council,” the report said.
Federal and state intervention led to a painful catch-up phase starting in the late 1990s. San Diego's water rates have risen steadily since then, much of it to fund government-mandated projects.
On the sewer side, San Diego's fees also are among the highest for big cities nationwide.
A typical resident here pays about $556 annually in sewer charges. That's 95 percent higher than the national average of $284 per year, according to a 2005 survey by the National Association of Clean Water Agencies.
Los Angeles residents pay an average of $245 per year, while Phoenix residents pay an average of $184.
One reason for San Diego's elevated fees is the sewer department's hefty debt payments. About 25 percent of the department's annual budget is spent on payments to retire municipal bonds that financed past wastewater projects.
San Diego's bond debt is high partly because it didn't obtain federal grants to upgrade its sewage treatment plant in Point Loma.
In past decades, city leaders decided that the more stringent sewage treatment level prompted by the 1972 Clean Water Act would cost ratepayers too much while doing nothing for the health of the ocean.
In 1981, San Diego secured the first of its two waivers to avoid upgrading the Point Loma facility from advanced-primary to secondary treatment. Advanced primary is a less costly method that removes slightly fewer dissolved solids in sewage than secondary treatment.
“The bottom line was that eventually the federal grants ended,” said Dave Schlesinger, a former director of the sewer department. “As a result, San Diego was faced with having to do its own debt financing” to upgrade its sewer system.
Today, the city's leaders are debating whether to upgrade the Point Loma plant, which could cost $1 billion, or seek a third waiver and possibly be sued by environmental groups.
Other factors contributing to San Diego's high sewer rates include two water-reclamation plants built in response to a lawsuit over the waivers. These plants were expensive to construct and are expensive to operate, but neither sells much reclaimed water.
Costs also skyrocketed because city officials decided to ramp up sewer-line replacement from 15 miles per year to 40 miles beginning in 2002, said Scott Tulloch, another former director of the sewer department.
On top of all these cost generators, city officials worsened the finances for both water and sewer departments with their illegal or questionable financial policies, said critics such as Scott Barnett, a former executive director of the San Diego Taxpayers Association.
Barnett points to San Diego's former practice of charging right-of-way fees for its own utility lines.
Under this arrangement, the water and sewer departments paid roughly $100 million over the years to the city's general fund for existing pipelines that ran under city streets. These charges – similar to the franchise fees paid by gas, power and cable companies – were passed on to water and sewer ratepayers.
Right-of-way fees were an accounting gimmick used to divert money from utility ratepayers to San Diego's general fund, city officials have acknowledged.
“If that money had been applied to our capital projects, it would have chopped a percent or two off the rate increases,” Schlesinger said.
To capture more money for the general fund, San Diego leaders used another controversial accounting practice known as service-level agreements. Last year, an auditor's report said the water and sewer departments were overbilled a total of some $1 million for services provided by other city departments.
Sanders has stopped such transactions.
“The service-level agreements were legitimate concepts that got out of hand,” said George Loveland, a former assistant city manager.
Terry
Rodgers: (619) 542-4566;
terry.rodgers@uniontrib.com