Water and wastewater rates in the city of San Diego could rise dramatically in the next four years if the City Council approves rate hikes to offset rising costs.
If approved Tuesday, water rates will increase by 63% through 2029 and wastewater rates by 31%. The increased costs are part of the city’s efforts to keep clean water coming through its residents’ pipes, according to city documents.
“The main driver of the water rate increase is higher costs to purchase water from the San Diego County Water Authority, which are passed on to the city’s customers,” a statement from the city read.
“Purchasing water from the SDCWA is the second largest individual expense for the entire city of San Diego.”
Other reasons for the rate hike include increasing costs of maintenance, increasing energy rates, Pure Water Phase 1 operations and more.
“The city is dedicated to minimizing rate increases for its customers by focusing on long-term financial planning, making strategic infrastructure investments, securing grants and low-interest financing, and maximizing the use of local water resources,” the statement read. “However, despite these efforts, periodic rate adjustments are necessary to address critical challenges.
“These include replacing aging infrastructure, addressing rising costs for materials, chemicals, and energy used in the treatment and distribution of water and the collection, conveyance, and treatment of wastewater, and maintaining competitive compensation to attract and retain the skilled staff that keep our system safe and provide excellent customer service.”
A report released Friday by the city’s Independent Budget Analyst found that the costs were a bitter pill to swallow, but necessary medicine all the same.
Studies prepared by the Public Utilities Department “demonstrate the need for increased revenues for both systems in order to maintain operations,” the IBA report read. “In the current environment of declining water sales and wastewater flows which generate revenue for the systems, this inevitably means increasing rates.
“Without additional revenues to support the system, PUD will need to cut expenses, either through decreased operating costs or lower spending on the Capital Improvements Program. Both of these options come with significant risks and tradeoffs that the council should be aware of prior to making their final decision.”
If the council passes the proposed rate hikes Tuesday, the costs will go up in January. For a 1-inch meter, the monthly water service charge is $46.63. That increases to $56.83 in January 2026, $65.08 in January 2027, $72.57 in January 2028 and $80.56 per month in January 2029. Rates all rise at a similar percentage, from the smallest meter sizes (5/8 and 3/4 of an inch) to 16 inches.
“The need to increase rates is driven by a combination of increasing costs to both systems, combined with stagnant sales and flows that require increased costs to be supported by rate increases,” the IBA report read. “The wastewater system is in a healthier position due to regular rate increases over the past four years, while the water system is in the most need of financial assistance due to increasing water purchase costs and lower financial buffers due to the lack of regular rate increases prior to 2023.
“As discussed in this report, lower rate revenues will require reductions to operating expenditures, with the most acute impacts occurring within the Water System during FY 2026 and 2027.”
The San Diego City Council will discuss the cost increases at its 2 p.m. session Tuesday.
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