Small water districts want to make sure big city San Diego continues to help pay off the Water Authority’s debt.
By MacKenzie Elmer, Voice of San Diego
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Rage Against the Machine’s “Take the Power Back,” is quickly becoming part of San Diego’s water wars soundtrack.
The power systems at play in that tune have nothing to do with California water politics. Nevertheless, its general message aimed at challenging oppressive systems sprang to mind while I watched Valley Center Municipal Water District board meeting last month.
What rocked so hard at that meeting? General manager Gary Arant convinced his board to make an offer to Assemblymember Tasha Boerner, an increasingly controversial figure in the San Diego water world. Catch up: She’s pushing a bill backed by the city of San Diego (which holds the most weight in local water decisions) to prevent two rural water districts from leaving the San Diego County Water Authority.
Many rural and conservative water districts, like Valley Center, see that as a ploy to undo their autonomy over local water decisions. Arant’s board was uneasy about supporting the Democrat from Encinitas’ legislation. But Arant presented this as a golden opportunity to seize some of San Diego’s power away, an issue he’s touted for years.
His offer basically was: We’ll support your bill that hurts our local control, as long as you give small water districts more voting power at the Water Authority. (It’s not power they ever had before, so allow me another slight deviation from Zack de la Rocha’s original lyrical meaning.)
But if the lawmaker were to agree, and such an amendment passed, that’d be a huge change in the power structure. The city of San Diego, as the largest water buyer in the region, currently holds the most votes at the Water Authority. The city only needs a few other water districts to gain a 55 percent majority on decisions to build multi-billion water projects and can make or break policies on who or how they’ll be paid for.
Who will be on the hook for that debt is the real reason Arant and other water districts want to play ball with the assemblymember, foreshadowing another upcoming water dispute in San Diego County.
Stay with me. First, a quick lesson on water pricing. The cost of water in San Diego has two components: About 72 percent of the Water Authority’s revenue is tied to how much they sell, called the volumetric rate. The remaining 28 percent is a fixed cost everyone pays to transport the water here from the Colorado River and Sierra Nevada mountains.
But fixed costs make up about 85 percent of the Water Authority’s expenses, according to a report from Berkeley economist Michael Hanemann. That’s “a serious financial problem” for the Water Authority, Hanemann wrote.
The Water Authority is selling about 40 percent less water than it did in 2010 as Californians learned to conserve. And the Water Authority will sell even less once water districts start recycling and drinking their own wastewater. The city of San Diego expects to generate half of its water demand this way by 2035. And Oceanside and a bloc of eastern San Diego County water agencies began building their own, too.
Some water districts like Valley Center don’t have the population to make enough wastewater worth recycling, so they’re 100 percent dependent on the Water Authority.
“Unless something’s done to improve the balance between fixed revenues and fixed costs, we’ll face significant rate increase,” Arant said.
The Water Authority is already paying off about $2 billion in debt from some expensive emergency water storage projects, which successfully got San Diego through the most recent drought.
Less water sold means less dollars made at the Water Authority. So there’s a serious conversation happening in the background about whether to raise the fixed rate, making the Water Authority’s viability less dependent on selling water.
But changes to that pricing model will need support from the Water Authority’s governing board, controlled by the city of San Diego. The question is: Will the city of San Diego be willing to raise the cost of water on itself?
Water Authority board Vice Chair Nick Serrano, San Diego Mayor Todd Gloria’s deputy chief of staff, told me the city is also waiting on the Water Authority to share its plans for this water pricing conundrum. But Serrano assured me the city is not interested in leaving the other water agencies on the hook with all that debt.
“We’ll still be part of the Authority and need the supplies and reliability,” Serrano said. “We want to be a good partner with other member agencies to make sure their ratepayers don’t pay the brunt of it. But where is the long-term planning to show this isn’t going to happen?”
