City Council Approves Two-Tier Water Rate

The City Council on Tuesday night unanimously approved a proposal to eliminate the five-tier water rate structure and adopt a two-tier system that will be implemented in January 2011.

The unanimous approval, which will be followed by formal adoption at the Oct. 19 City Council meeting, came after a number of residents asked for "fairness" in water rates, and some said the two-block structure would result in higher payments than necessary.

The two-tier rate proposed by city staff was put forth to address two issues: fairness among water users and the 15 percent increase in water costs that the city will have to pay the San Diego County Water Authority beginning January 2011.

Under the new system, single-family customers who use between 1-199 units will pay $4.02 per unit. The charge for 200 units and over will be $5.74 per unit. The new plan would also increase the rate for nonresidential customers from $3.80 to $4.10 per unit (see chart).

Though all council members ultimately approved the proposal, Councilman Jim Cunningham said he preferred an allocation of water method, which he considers the "gold standard" of charging for water. (See video.)

"It's the most fair and equitable system," he said. "My preference is to go to an allocation method, not a two-tier method."

He cast his vote for the proposal, however, noting that he would defer to his colleagues who have sat on the council longer but with the "hope" that allocation methods would be considered in the future.

The City Council's vote came after a number of residents expressed concerns with the different forms of charging for water.

Some residents expressed their discontent with the two-tier proposal, stating that the increase in rates would be more than the 15 percent increase facing the city. Others said the proposal would be the most equitable approach to charging for water.

Matthew van den Bergh, a Poway resident since 1982, said the city is using the 15 percent increase as "an excuse" to gain more revenue from residents.

Another Powegian suggested a multiblock and "steep" rate plan as opposed to the five- or two-tier plans to encourage more conservation. (See snippets of the public hearing in the video.)

Two candidates for City Council, Pete Babich and Dave Grosch, were present and both asked for "fairness" when considering the rate plan.

City staff also proposed to decrease sewer rates due to a secondary treatment waiver given to the city of San Diego, which ultimately delays costs to the entire region. Because of the delay, Poway is now able to reduce sewer commodity charges 13 percent for all users.

Combining both the water and sewer proposals, according to the report, "will increase the bimonthly water and sewer bill of a median single-family residential customer (25 units bimonthly) by $12.79."

Assistant City Manager Tina White said the rate changes would contribute roughly $800,000 to the Fund Balance, a reserve that is used for emergencies such as wildfires, capital projects, and as a backup in case the city sells less water than expected.

The water proposal comes after City Council members asked staff to evaluate the rate plan after concerns from residents were received about the five-tier plan that was adopted last year. Staff then researched different rate structures for several months with the conclusion that the two-tier proposal would be best for the city.

The city gave more than the required 45-day-notice of the Tuesday hearing, as mandated by Proposition 218, to all water and sewer users. Adoption of the proposal is fair game because only 53 written protests of the required 6,800 were submitted to the city as of Sept. 22.