San Diego may need to raise water rates by at least 44% by 2031, analysis show

If the City Council approves the additional hikes when they come to a vote on this next year, the cumulative six-year rate increase would amount to more than 90%.

SAN DIEGO — A new city analysis presented to the San Diego City Council on Monday says San Diego may need to raise water rates by at least 44% by 2031. Sewer rates would increase by a total of 15%. 

Those increases would be on top of rate hikes that were just approved last fall.

If the City Council approves the additional hikes when they come to a vote on this next year, the cumulative six-year rate increase would amount to more than 90%.

“It’s not just water rates that are going to hit San Diego residents. Energy rates are going up, too. We have a pair of sales tax increases, which we could be voting on in 2026,” Michael Frattali, a San Diego resident and retired city employee, said. 

The analysis by the Public Utilities Department said water rates in San Diego must go up another 44.2% between 2028 and 2031, even though the City Council agreed in October to raise them a cumulative 31.3% this year and next. 

Officials argue the system is under financial strain and that rate increases are necessary, unless other changes can be made. 

The outlook is projecting large rate hikes despite the city’s decision to delay dozens of key infrastructure projects by three years to reduce expenses. 

Officials postponed multiple projects by two years during the summer. The delays were extended to three years after the City Council did not approve four-year water rate hikes, but opted for two-year water rate hikes instead. 

“Certain construction projects are being delayed by 2 years, which may actually make it more expensive,” Frattali said. 

Frattali and presenters at Monday’s meeting argue there could be significant financial consequences to delaying infrastructure projects. 

However, Frattali believes there are other steps the city should be taking to cut costs instead of rate hikes. 

“Things like obliging city employees to contribute more to their pensions, maybe thinning the ranks of senior management, which has increased kind of dramatically over the past four years. Other things that can be done are just reforming how the city contracts out certain projects. And taking a very, very close look at Pure Water Phase 2 to see if it’s actually cost-effective if you make realistic environmental assumptions,” Frattali said. 

The San Diego Pure Water Project is a multi-phase initiative using advanced technology to turn recycled wastewater into safe drinking water. 

Pure Water Phase 1 is the largest construction effort the city has ever taken, and is estimated to cost approximately $1.76 billion. 

The City is continuing to prepare for Phase 2 of the program. 

The project aims to supply nearly half of San Diego’s water locally by 2035. 

At Monday’s City Council meeting, council members and other city leaders vowed to spend the next 12 to 18 months searching for ways to boost revenue or cut spending for the City’s water and sewer systems in order to prevent the major rate hikes. 

The rate hikes could have a ripple effect around San Diego County as well. Several cities, including Coronado, Imperial Beach and Del Mar, receive their water through agreements with the City of San Diego. 

Meanwhile, on Wednesday afternoon, CBS 8 reached out to the city for comment, but a spokesperson said it was too late in the day to get a statement by the deadline.