Rate-hike notice has consumer group boiling mad

By Matthew T. Hall
STAFF WRITER
The San Diego Union-Tribune January 30, 2007

A local consumer advocacy group has threatened to sue the city of San Diego if it pursues a plan to raise water and sewer rates next month.

Two weeks after the city mailed ratepayers a legally required notice about the possible increase, the Utility Consumers' Action Network sent a letter yesterday to Mayor Jerry Sanders calling the notice deficient and deceptive.

City officials plan to respond in writing to the letter by Friday.

Michael Shames, UCAN's executive director, is demanding a new notice be sent that expresses details of the proposal in clearer terms and does not "discourage" ratepayers from mailing in a protest form to halt the increase.

"The law makes it such that you can't try to mislead or fool the public," Shames said. "By doing it the way they've done it, the city ends up undermining yet again its tenuous credibility with the public."

City Attorney Michael Aguirre said city officials would discuss Shames' concerns and respond to each by Friday.

"It's not that I'm not standing by it," Aguirre said of the notice the city mailed two weeks ago. "It's that I want to make sure I understand the concerns that are raised by Mr. Shames."

Sanders declined an interview request through a spokeswoman, but mayoral spokesman Fred Sainz said city officials are "incredibly comfortable" that their notice abides by the spirit and the letter of the relevant state law, Proposition 218. Council President Scott Peters did not return a call.

Shames faults the notice for suggesting water rates would generally rise 6.5 percent a year for four years under the proposal. Shames said residential customers could see increases closer to 12 percent next year while businesses pay less than 2 percent more in what Shames calls a "bailout for business."

The council is poised to vote on the rate increase proposal Feb. 26. As of last week, City Clerk Liz Maland said her office had received about 3,000 envelopes containing protest forms.

A majority of about 274,000 water customers must file formal protests to upend the proposal without a vote of the council. A protest form was included in the city's notice.

Shames filed a lawsuit against the city in 2004 the last time it altered its sewer rate structure. A tentative settlement of the lawsuit would force the city to reimburse residential ratepayers $35 million and pay Shames' lawyers $5 million for unfairly having homeowners subsidize businesses for 10 years.