San Diego Council Votes 6-2 to End Tiered Water Rates After $40M Loss

San Diego residents who use the least water will pay more under a new billing system approved by the city council on Tuesday. The 6-2 vote replaces the tiered pricing structure for single-family homes with a flat rate based solely on consumption. The change is a direct result of a 2015 lawsuit that the city ultimately lost.

The legal dispute began in 2015 when residents challenged the city’s existing model. That system charged homeowners different rates depending on how much water they used. Efficient users with water-saving landscapes paid less per unit, while those with large yards or pools paid more. The court ruled this structure invalid, forcing the city to change its approach.

San Diego tried to keep the old system. City leaders took the final decision to an appeals court but were unsuccessful. The city is now responsible for a $40 million settlement. Council members voted to adopt the new structure despite their reservations about the court’s mandate.

A city staff member presented the agenda item to the council. “The city does not agree with the court's decision in the [Daniel Patz et al. v. City of San Diego] case. However, we are legally required to have a structure the court deems valid,” the staff member said.

The financial impact will fall mostly on conservation-minded households. The city estimates the average monthly bill for a low-use customer in a single-family home will increase by about $6. In contrast, high-use customers can expect their bills to decrease by $20. The shift removes the financial incentive for saving water that existed under the previous tiered system.

Council member Sean Elo-Rivera, who represents District 9, voiced his frustration during the meeting. “It makes me angry because what is being imposed on us as a city and, therefore imposed, on the people of San Diego is a penalty for doing more to conserve water,” Elo-Rivera said.

The new billing structure takes effect in January. It will coincide with a separate water rate increase that was previously approved by the council. Residents in the region have expressed mixed feelings about the change, given the area’s history with drought and water shortages.