The San Diego City Council delayed a planned vote on steep water and sewer rate hikes Tuesday, saying it needs more time to consider them amid concerns over the potential impacts on the region’s cost of living.
The proposal would raise water rates for San Diego customers by more than 60% and sewer rates by more than 30% over the next four years.
City officials say the increases would help cover rising costs for labor, imported water, chemicals, energy, construction projects and other priorities — and pull the city’s Public Utilities Department back from a financial cliff.
But council members and residents who spoke during the public comment portion of Tuesday’s council meeting said the cost of living in San Diego is already too high, and that another solution to the department’s finances must be negotiated.
In a report released ahead of the meeting, however, the city’s budget experts said that at this point, no other solution exists.
The City Council postponed voting on the proposal and decided instead, by an 8-1 vote, to keep discussing it and vote on it at its meeting on Oct. 28. Councilmember Vivian Moreno voted no.
“There is never a good time for rate increases, especially at this moment when affordability is on the minds of San Diegans,” said Council President Joe La Cava, who suggested tabling the proposal until the October meeting.
“Despite the good efforts that have been done so far, I remain concerned about the impact these rates over four years will have on San Diegans,” he added.
More than two dozen people came to the meeting to speak about the proposed rate hikes, with many saying they were especially frustrated in light of other recent city price hikes, including new charges for trash pickup and for parking in Balboa Park.
“When you need money to pay the bills for San Diego, you come to us,” said resident Jan McNamara. “Where are we supposed to go to get that extra income?”
Affordability concerns were shared among nearly all the public commenters, including those on fixed incomes and those still recovering from last winter’s flooding that destroyed homes in southeastern San Diego.
“I talked to lots of San Diegans every day. They are not having this, and neither am I,” said Councilmember Stephen Whitburn. “The rent is too damn high. The electric bills are too damn high. Parking rates are too damn high … This is a non-starter. This is dead on arrival.”
The proposed rate increases wouldn’t kick in until next January and would be spread out incrementally until January 2029, resulting in cumulative 62% hikes to water rates and 31% hikes to sewage rates.
The council’s vote came just after the city’s independent budget analyst warned in a report last week that the higher rates would be unavoidable in order to keep the Public Utilities Department afloat, and that their implementation starting next year was “crucial.”
After Tuesday’s vote, IBA analyst Jordan More, who authored the report, said there would be no negative impact from delaying the vote a month — but he stressed that an Oct. 28 vote is “cutting it as close as you can.”
It takes about 60 days to update the city’s billing system, he explained, meaning that if the rate increases are approved at the Oct. 28 meeting, the billing system could be updated before January.
Without additional revenue, the IBA predicts that the Public Utilities Department will need to cut its expenses by slashing either its operating costs — likely by cutting staff — or its spending on capital improvements.
Cutting operating expenses would in turn hurt customers, the IBA said in its report, including through potential longer call times to customer service and increased service interruptions.
“I don’t see a way for them to accommodate a lower rate,” More said. “If I did, I would have said.”
Under the proposal, water rates would rise by 14.7% in January 2026, 14.5% in 2027, 11.5% in 2028 and 11% in 2029. Sewer rates would rise 6% in January 2026, 6% in 2027, 8% in 2028 and 8% in 2029.
The water system is in most urgent need of financial help, according to the IBA report, largely due to the rising costs of buying water from the San Diego County Water Authority and the lack of regular rate hikes prior to 2023.
Because the wastewater system has raised rates regularly over the past four years, it’s in a somewhat better financial position.
The IBA report especially highlights the urgency for the next two fiscal years — particularly fiscal year 2027, which the report calls “the nadir as far as financial metrics for the system.”
Council members said Tuesday they were concerned about how the proposed rate increases would affect their constituents and asked the Public Utilities Department to explore other options.
La Cava said he wanted a better understanding of how the rate projections might change in later years. Councilmember Sean Elo-Rivera asked about other revenue opportunities the department could consider, such as using property it owns for solar and battery projects or considering leasing out its underused land.
Department officials pointed to steps they’ve already taken to soften rate hikes, including saving nearly $360 million by delaying capital improvement projects, using stored water in its reserves and adjusting summer sales.
Moreno, the only council member who voted against pushing the proposal to the Oct. 28 meeting, said she’s also opposed to the proposed rate hikes in general.
Pointing to the department’s delayed capital improvement projects, she questioned whether the San Diego County Water Authority could also shoulder some cuts.
“I strongly believe that San Diegans simply cannot afford additional hits to their monthly expenses,” she said, until steps are “taken regionally to lessen future rate increases.”
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