San Diego council approves two‑year water rate adjustment after hours of public testimony

San Diego City Council on Oct. 28 approved a narrowed multi‑year water rate action — focused on two years of increases for the city’s Public Utilities Department — along with multi‑year wastewater and recycled water adjustments, following an extended staff presentation, analysis from the Office of the Independent Budget Analyst (IBA), and several hours of public comment.

Public Utilities Director Juan Guerrero and Executive Assistant Director Lisa Slaia told the council the largest driver of the proposed increases is wholesale water cost increases set by the San Diego County Water Authority, combined with the city’s operations, deferred capital needs and long‑term investments such as the Pure Water program. “Without these actions, our financial metrics fall below bond covenant requirements and would require immediate operational cuts,” PUD staff said, summarizing mitigation measures and roughly $360 million in internal savings already taken to soften rate impacts.

The Office of the IBA, represented by Jordan Moore, warned that delaying or substantially lowering the proposed increases would leave the utility unable to meet bond covenant tests and could force immediate cuts or layoffs. “Approving lower rates would almost entirely eliminate any margin for error,” Moore said.

Public comment was deeply divided. Supporters of the rate increases — including labor representatives and engineering groups — warned that underfunding the utility risks degraded service, regulatory noncompliance and long‑term higher costs. “Maintenance is much wiser than emergency repairs,” said Michael Drennan of the American Society of Civil Engineers. Workers represented by AFSCME Local 127 said cuts would directly affect city employees who maintain the system.

Opponents and affordability advocates urged the council to reject or scale back increases, to demand that corporate users pay higher shares, to pursue more non‑rate revenue from PUD leases, and to pressure the County Water Authority for lower wholesale rates and better transparency. The Workers Benefit Council urged a halt to “corporate water subsidies” and called for progressive revenue alternatives. Several callers also raised flood‑victim billing and meter accuracy concerns; staff agreed to follow up on specific cases.

Council debate centered on two competing imperatives: the city’s obligations to maintain system reliability and bond covenants versus the acute affordability burden for residents. Council Member Whitburn moved an amended approach to limit the city’s proposed increases to the necessary two‑year adjustments (14.7% for 2026 and 14.5% for 2027 on the city portion as recorded in the motion), while adopting staff recommendations on wastewater and recycled water; the motion was seconded and passed by a 5–4 vote. The transcript records Council Members Moreno, Lee, Von Wilpert and Foster voting no.

City and PUD staff said they will continue work with the city’s representatives at the County Water Authority and pursue non‑rate revenue options (including updating PUD leases and exploring renewable energy and parking at reservoirs) as possible offset strategies.

The two‑year water increases will take effect Jan. 1, 2026 (first year) and Jan. 1, 2027 (second year) for the city portion of rates; PUD and council members said they will report back with additional analysis and implementation details.