S.D. Council Votes No on Water Rate Increase : Conservation: City instead adopts mayor’s plan of rebates for those who save, to begin after summer.

Rejecting a proposed 17.1% water rate increase that city water officials had called essential, the San Diego City Council instead approved Mayor Maureen O’Connor’s new rate structure Tuesday that will freeze rates--and in some cases offer rebates--for San Diegans who conserve at least 20%.

By a vote of 6 to 1, the council delayed consideration of a water rate increase until May, when budget deliberations are scheduled. Instead, they adopted O’Connor’s “Conservation Reward” system, which imposes a “drought surcharge” on San Diegans who cut their use less than 20% from 1989 figures.

Under the mayor’s temporary drought-triggered system, the average family that used 350 gallons per day in 1989 will save nearly $3 a month if it conserves 20%--its monthly bill will go from $16.80 to $13.82. If it saves 50% or more, that family will pay just $6.41, thanks in part to a $3.29 conservation rebate.

“I feel very strongly that the community has kept faith with us, and we must keep faith with the community,” O’Connor said, explaining why she opposed City Manager Jack McGrory’s proposed 17.1% water rate increase, which had included conservation incentives. “I’m going to keep my word to the community.”

In that vein, even under the mayor’s new rate structure, she said San Diegans who can prove they were conserving before 1989 will not be forced to pay surcharges either.

“This is reward, not punishment,” she said.

Despite the council’s apparent desire to encourage San Diegans to tighten their taps, however, the new residential rate structure will probably not take effect until after the hottest and thirstiest months of 1991. McGrory said the city’s billing computers will not be reprogrammed until summer’s end, and it will be 60 days after that before San Diegans receive their first revised bills.

Still, O’Connor predicted that, once the first bill arrives, it will have an impact, especially on major users--such as her and her husband--who consume more than 600 gallons a day.

“After they get their first bill, everybody’s going to drip irrigation--including me--because we’re talking a lot of money,” she said. “My two meters are residential. I will have to pay, if I don’t conserve, $1,300 under this new proposal.”

Last month, after an inquiry by The Times, the mayor disclosed for the first time that she has two water meters on her 2-acre property, and that her average daily water use during 1990 was 3,248 gallons.

The council’s action Tuesday only applied to residential customers, and the mayor called for similar and perhaps stiffer rate structures for industrial and commercial users to be considered next week. She said these groups account for 43% of all city use and, in some cases, have not been saving.

According to O’Connor, the county of San Diego’s administrative headquarters did not save “a drop” of water in March, despite its pledge to save 30%. The San Diego Unified Port District, meanwhile, increased its usage 5%.

“Those are the ones who should be paying the tough penalties,” O’Connor said.

By rejecting the proposed 17.1% rate increase, McGrory said, the council has forced the city Water Utilities Department to further reduce its already pared-down capital improvements fund, which maintains, replaces and repairs the city’s aging water delivery systems.

“You’re delaying the financial impact of those improvements,” McGrory said. He declined to speculate about what disasters could befall the city as its infrastructure continues to deteriorate, saying only: “A pipe gets to a certain age, it’s more likely to break.”

To survive, McGrory said, the department will have to reshuffle its budget to make up a nearly $8 million expected shortfall.

“I don’t think there are enough cuts left in the capital improvement projects (budget) to make up the difference. We don’t lay people off. . . . But we may have to make cuts” in personnel, he said.

Milon Mills, director of the city Water Utilities Department, would not say whether or not the council’s action was a disappointment, commenting only, “We made a recommendation. We thought our recommendation was the best proposal. Now we go to plan B.”

In a report to the City Council in support of the rate increase, McGrory had warned: “Absent an increase in rates, total expenses will continue to exceed anticipated revenues, resulting in negative net cash flows and a negative fund balance of some $39.7 million by the end of fiscal year 1993.”