The San Diego City Council is set to consider proposed water rate increases that are needed over the next three years to improve customer service technology, repair aging infrastructure and continue to provide safe, reliable drinking water. 

Why Water Rates are Increasing 

As proposed, water rates will increase 10.2% overall beginning on Dec. 1, 2023, and up to 8.7% overall on Jan. 1, 2025, but that amount could be less. 

The proposed rate increase is due to a rate hike from the San Diego County Water Authority, the region’s water wholesaler, who buys and imports the water we need to the region.  

In March, the Water Authority had announced its plan to increase water rates by 14%. However, the City of San Diego, through its representatives on the Water Authority Board, were successfully able to bring the Water Authority’s proposed rate increase down to 9%. 

In addition, the proposed increase comes following an independent cost-of-service study on water services that looked at the future 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. 

It’s the responsibility of the City’s Public Utilities Department to provide reliable water service while protecting our water resources and the public’s health.  

The City also must fund routine rehabilitation and replacement of aging infrastructure to ensure Public Utilities provides reliable service that complies with 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. 

The department does not generate a profit and is not supported by the City’s General Fund. Therefore, the City’s water rate structure must account for and set rates to reflect the full cost of providing water service. 

A notice with information about the proposed rate increases was mailed to all City of San Diego water customers in July 2023, in compliance with Proposition 218.  

To answer questions on the cost-of-service study and proposed rate increases, the City held three informational community meetings in July, August and September. 

More information about the proposed water rate increases, including the Proposition 218 notice in 10 different languages, is available at sandiego.gov/rate-adjustments.   

How Water Rates are Spent 

Making sure San Diegans have clean water is expensive, partly due to the state and federal regulations the City must follow and the area’s limited fresh water sources.  

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 power, chemicals, 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 1.4 million residents while maintaining strict quality standards. 

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 expensive imported water. Pure Water will provide nearly half of San Diego’s water supply locally by the end of 2035. 

How the City is Improving Customer Service 

Investments in new technology are helping the City’s Public Utilities Department improve customer service. Over the past six months, significant progress has been made on expanding online access to water and wastewater services, modernizing the phone system and recruitment and enhanced training of customer support staff. 

Working closely with the City’s Department of Information Technology, the Department is on track to launch a modernized phone system this year. This new system will allow for more efficient call resolutions and data-driven resource allocations. 

The Public Utilities Department also heard from customers that they want to access services online when it’s convenient for them. In March, it launched new webforms allowing San Diegans to submit requests and have those issues resolved within one to two business days. 

The department is developing a new online customer self-service portal that integrates with the billing system, allowing customers to complete the most common service requests quickly and conveniently from a computer or mobile device. The first phase of the new self-service portal is expected by spring 2024. 

A citywide deployment plan is being developed for Advanced Metering Infrastructure (AMI), also known as “smart meters.” Smart meters allow water usage data to be transmitted electronically directly to our network as well as to customers. Smart meters improve the reliability of water meter reading and empower customers to understand and adjust their usage. The plan will be completed this year. 

For more information and to learn more about the planned improvements, visit the Public Utilities Customer Service webpage.