2023 Proposed Increase to Water Rates
The City of San Diego is proposing changes that will affect your water bill. Last year, the City contracted with an independent rate consultant to conduct a cost-of-service study on water 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 water utility through fiscal year 2025. The study found that if the City’s water rates remain unchanged, there will not be enough revenue to provide necessary water services for fiscal years 2024 and 2025.
As proposed, water rates will increase 10.2% beginning on Dec. 1, 2023, and up to 8.7% on Jan. 1, 2025. Additionally, the City is seeking to pass through any rate increases imposed by the San Diego County Water Authority. Operations and project needs are analyzed annually, and the increase in future years may be lower than these figures. Historically, the City has implemented lower-than-projected increases because the operational needs do not reach the cost assumptions in the cost-of-service study due to process changes and/or efficiencies.
The City’s Public Utilities Department will hold three public meetings (schedule below) where residents can receive more information and ask questions before the public hearing on Sept. 19, 2023.
Proposition 218 Notice
Frequently Asked Questions
Why are water rates going up?
The City of San Diego’s Public Utilities Department (Department) is dedicated to providing reliable water service in a cost-effective manner while protecting our water resources and the public’s health. The Department does not generate a profit and is not supported by the City’s General Fund. The City’s water rate structure must account for and set rates to reflect the full needs of providing water service. The Department 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 the Department is providing reliable service that complies 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 ratepayers over the useful life of the infrastructure.
What does my water bill pay for?
Making sure San Diegans have clean water is expensive, partly due to the local, state and federal regulations the City must follow. Approximately 59% of the Public Utilities’ Fiscal Year 2024 Budget is expected to go toward the purchase of imported water and the remaining 41% of the Department’s budget will pay for maintenance, upgrades and debt service for the City’s water system. Updating and maintaining our vast water delivery system is essential for the City to continue bringing clean water to our 1.3 million residents while maintaining strict quality standards.
Current upgrade projects include:
- Investing in customer support solutions to address routine customer concerns quickly and effectively.
- Resiliency improvements at water treatment plants that produce millions of gallons of water per day for delivery across our 3,300-mile distribution system.
- Replacing 40 miles of pipelines each year to reduce pipeline failures.
- Increasing onsite renewable power from 1,910 kilowatts (KW) to 2,766 KW, reducing greenhouse gas emissions and long-term costs.
The City is also continuing its investment in the Pure Water Program, a landmark water recycling program that will greatly reduce the need for the City to purchase imported water. For the Pure Water Phase 1 projects, the City is borrowing $733.5 million at 1.38%, saving over $300 million in avoided interest costs to reduce water imports by 40%. Our largest infrastructure program to date, Pure Water will provide nearly half of San Diego’s water supply locally by the end of 2035.
To answer questions on the cost-of-service study and proposed rate increases, the City is hosting a series of informational community meetings over the next several months. The meetings will be held:
- Wednesday, July 26, 2023, from 6 to 7 p.m., at Metropolitan Operations Complex II Auditorium, 9192 Topaz Way, San Diego, CA 92123.
- Tuesday, Aug. 22, 2023, from 6 to 7 p.m., at Valencia Park/Malcolm X Library, 5148 Market St., San Diego, CA 92114.
- Tuesday, Sept. 12, 2023, from 6 to 7 p.m., at Pacific Beach/Taylor Library, 4275 Cass St., San Diego, CA 92109.
Please RSVP. Language interpretation services can be arranged. Please send us your language requests at least three days in advance with your RSVP. You may also submit questions in advance with your RSVP. Each presentation will also be live-streamed on the City's YouTube page.
Public Hearing Information
A public hearing will be held on proposed maximum increases to water rates and pass-through charges in calendar years 2023 through 2025. The public hearing will be held Sept. 19, 2023, at 2 p.m. at the City Administration Building, 202 C St., 12th Floor, San Diego, CA 92101. The City Council will hear and consider oral testimony and written materials submitted regarding the proposed rate increases at the hearing.
The City Council will have the authority to adjust the proposed rate increases in response to oral testimony and written materials submitted for consideration. Only formal written protests will be considered under the City’s Proposition 218 protest tabulating procedures and must be received before the close of the public hearing either in person at the public hearing or via mail to City Clerk, 202 C St., MS 2P, San Diego, CA 92101.
Per state law, the public hearing will be televised on City TV and simulcast on the City’s website at sandiego.gov/citytv. More information about Council meeting access and public comment is available online at sandiego.gov/cityclerk/participate.
At the close of the public hearing, the City Council will consider and may approve the rate increases. Oral comments at the public hearing will be considered by the City Council but will not qualify as formal protests unless accompanied by a written protest. If, by the close of the public hearing, written protests against the rate increases and pass-through charges are not presented by a majority of property owners or tenants responsible for paying the utility bills, the City Council will be authorized to adopt a resolution to increase the pass-through charges and water rates and charges. If adopted, the calendar years 2023 and 2024 increases will become effective Dec. 1, 2023, and a public information campaign will commence to ensure customer awareness.
On Jan. 1, 2023, a pass-through charge from the San Diego County Water Authority (CWA) of 2.5% went into effect to pay for increases in the cost of imported water supplies. The City currently imports as much as 90% of its water, which is purchased from CWA.
Also, wastewater rates increased by 4% on Jan. 1, 2023. The increase will help the City continue to upgrade core infrastructure by replacing aging pipes and wastewater mains and fund investments like Pure Water. The change to your City of San Diego Public Utilities bill will vary based on your type of account (commercial, residential, etc.) and your use of the wastewater system. Following a cost of service study on wastewater (sewer) rates, on Sept. 21, 2021, the City Council approved a four-year consecutive rate increase starting with 5% in 2022, up to 4% in fiscal years 2023 and 2024, and up to 3% in fiscal years 2025 and 2026.
Decreasing Your Water Usage
To decrease your water usage, you can use water more efficiently, repair leaks and ensure that you have the most efficient plumbing fixtures and toilets, washing machines, dishwashers and shower heads. The Public Utilities Department offers all kinds of tips, hints, programs and rebates to help you save water. For more information, visit: wastenowater.org.
Annually, from November through April, the City monitors the amount of water each customer uses for wastewater billing because that is when the highest percentage of water used is returned to the sewer system. The City monitors your water usage during two billing cycles and uses the total from the cycle with the least amount of usage to calculate your sewer rate. By conserving water during the winter monitoring period, you can lower your sewer rate during the following year.
Also, some San Diego residents may qualify for MAAC’s Low Income Household Water Assistance Program.
The City of San Diego requested authority to a pass-through charge from the San Diego County Water Authority (CWA) to pay for an increase in the cost of imported water rates up to 3% beginning Jan. 1, 2023.
The City currently imports as much as 90% of its water, the bulk of which is purchased from CWA. CWA considers rate adjustments every year and its board approved its next rate adjustment on June 23, 2022, effective Jan. 1, 2023. CWA rate study has cited changes in the cost of water importation and energy prices as the driving forces behind its rate adjustment.
Proposed water rate increases were presented to the City Council’s Budget and Government Efficiency Committee on June 22, 2022. The rate increase was approved by the City Council at a public hearing on Sept. 20, 2022.
Below is the Proposition 218 notice which was mailed to all City water customers to inform them of the proposed rate increases. There are also translations of the notice in five additional languages.
For the first time in 10 years, the City of San Diego increased wastewater rates, by 5%, starting in January 2022. In addition, a pass-through charge from the San Diego County Water Authority to pay for an increase in the cost of imported water increased water rates 3% beginning in January 2022.
The rate adjustment increases revenue 5% for sewer services and will help the City continue to upgrade core infrastructure by replacing aging pipes and sewer mains. It also funds investments like Pure Water, a landmark water recycling project that will increase the supply of local drinking water, avoid wastewater treatment cost increases and reduce discharges to the ocean.
The changes to water and sewer bills vary based on the type of account (residential, commercial, etc.) and the use of the wastewater system.
The City currently imports as much as 90% of its water, the bulk of which is purchased from the San Diego County Water Authority (CWA). While the costs of purchasing water from CWA have risen over the past several years, the City is passed on a rate adjustment for the first time in two years of approximately 3% starting in 2022. Water and sewer rates in San Diego are comprised of base fees and usage charges for various customer classes.
The City conducted a cost of service study on wastewater (sewer) rates to evaluate future revenue requirements for operating and capital costs. 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. As a result, Public Utilities proposed a four-year consecutive rate increase starting with 5% in 2022, up to 4% in fiscal years 2023 and 2024, and up to 3% in fiscal years 2025 and 2026.
Proposed water and wastewater rate increases were presented to the City Council’s Budget and Government Efficiency Committee on April 7, 2021.
On July 8, 2021, the City released an addendum to the cost of service study that incorporated all of staff’s recommended changes to the cost of service study, as presented to the Council's Budget Committee on June 23, 2021. The cost of service study with the addendum is the final document used to calculate the noticed proposed rate changes.
The City Council approved the rate increases on Tuesday, Sept. 21, 2021.
For more information:
Below is the Proposition 218 notice which has been mailed to all City water and wastewater customers to inform them of the proposed rate increases. There are also translations of the notice in five additional languages.
In order for the public to have opportunities to receive answers to questions about the proposed rate increases, several community forums were held virtually during the months of July, August and September 2021. Answers to many of the questions asked at the forums are provided in the linked document below. Also, click to watch a recording of the Sept. 2, 2021, public forum provided in English and Spanish.
Additional Documents Concerning the Wastewater Cost of Service Study