public utilities

by Kelly Thornton | inewsource

In the coming months, San Diego officials will contemplate another series of water-rate increases to fund infrastructure improvements, but the Public Utilities Department will have to answer a lot of questions first about how money was spent from the previous series of rate hikes.

Councilman Carl DeMaio, who is on the council committee that oversees public utilities, and the San Diego County Taxpayers Association said before rates are raised, they want an accounting of funds from the four-year series of 6.5 percent increases that concluded last summer.

“The city has been unable to say how ratepayer dollars from the last rate case have been spent,” said Lani Lutar, president of the Taxpayers Association. “It’s unacceptable. There was a finite list of projects that were presented. It should be a thing they should be able to answer.” Lutar said the association has been asking for the information for more than a year.

Water rates in San Diego have increased between 82 and 111 percent for single-family households between 2005 and 2010, according to a civilian oversight committee that was created to monitor funds from the last rate increases. The city said the average household water bill has increased from $37 in 2005 to $72 in 2010.

Most of those hikes were to pay for the ever-increasing cost of imported water. And part of the raises were to fund capital improvements on a water delivery system that is thousands of miles long and ruptures about 100 times a year. Some of the pipes are 100 years old, and many of the most decrepit are made of old, rusting cast iron.

In an interview Thursday, Public Utilities Director Roger Bailey said a consultant, which must be approved by the City Council, will do a study to help determine whether a rate increase is necessary. The same type of study was done before the City Council adopted the four-year rate increase from 2007 to 2010.

A council committee is expected to take up the matter of hiring the consultant late this month or early March, Bailey said. The study will focus on whether the department’s revenue stream is adequate to cover obligations in the future, Bailey said. Commissioning the study was the first step to raising rates the last time around. But Bailey said a rate increase is not a done deal.

“I would hate to say to the public this is a study to decide rate increase,” Bailey said. “We want to know what will be the future costs and do we have a structure in place to cover those costs.”

Bailey said the department has done a “fantastic” job managing the funds, and that it’s in the process of choosing another consultant to do a separate audit of spending from the four-year rate hike series.

DeMaio issued a memo to the mayor and fellow committee members Thursday in anticipation of the cost-of-service study.

“It is five years later and the public has never been presented with an analysis detailing whether the 2006 rate changes provided the necessary funding to complete the capital improvement schedule included in the study,” DeMaio wrote.

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