City Shifts Water-Bill Rise to Property Taxes

The San Diego City Council has agreed to shift the cost of a $12-million payment to two water importing agencies from water rates to property taxes, a decision that will substantially benefit tax-exempt property owners but follows the council’s policy of forcing new growth to pay for itself.

The council voted Tuesday to stop billing water users for $11.98 million in improvements to the regional water distribution network and tax payments to the Metropolitan Water District and the County Water Authority.

That is good news for water users, who now pay average bills of $16.32 each month. Because of the change, planners now say they will ask for an increase of $2.45 monthly, effective Jan. 1, instead of the $4.08 they were prepared to request.

The Bad News

The bad news is that the charge will be shifted to property tax bills beginning in November, 1990, a change that will bring the city in line with the payment practices of all other cities in the Metropolitan Water District, which imports water from Northern California and the Colorado River.

“Large property owners in the city of San Diego with undeveloped holdings and little water usage” now will be forced to pay their share of the charges, said Henry Pepper, assistant director of the city’s Water Utilities Department. That group includes San Diego Gas & Electric, railroad companies, and Pardee Construction Co., he said.

The change forces owners of that property, who are fueling the need for an expanded regional water network by developing the land and attracting residents, to pay for a larger share of the expansion, Pepper said.

At the same time, however, tax-exempt property owners will benefit substantially. The Navy will save $750,000 annually, the state will save $267,000, and the San Diego Unified School District will save $94,000. The city of San Diego itself will save $289,000, primarily in decreased spending on water by its Park and Recreation Department, Pepper said.

The New System

Under the new system, a homeowner with an assessed valuation of $100,000 would see $25.78 added to his annual tax bill, according to figures supplied by City Manager John Lockwood’s office. A home assessed at $180,000 would be taxed $38.40 more.

After deducting that increase from his income tax, however, the owner of the $100,000 house would face a total increase of $18.56, if he is in the 28% income tax bracket. The owner of the $180,000 home would $27.65 more.

Those fees would be assessed instead of an annual average fee of $22.93 on water bills that goes to the two agencies, which are embarking on a $500-million campaign to expand and renovate the region’s water distribution network.