San Diego raises fees on industrial polluters for first time since 1984

Businesses that San Diego classifies as industrial polluters are going to start paying their fair share for local efforts to keep toxic sewer water out of the Pacific Ocean.

After getting major discounts for nearly 40 years, industrial polluters should expect to see sharp increases next summer in the fees they pay for treatment of industrial wastewater.

The increases are part of a package of sewer and water rate changes the City Council unanimously approved Sept. 21.

City officials have been criticized for not recalculating the industrial polluter fees since 1984, which has forced residential customers to pay tens of millions of dollars that should have been paid by industrial polluters, city audits said.

The spike in fees, which will affect more than 400 local businesses, will be phased in over four years starting in July 2022. A quarter of the increase will be levied each July through 2025.

The amount of increase varies depending on the kind of business and type of pollution.

About 300 hospitals, theme parks, car washes and heavy equipment rental businesses will see their annual fees increase to $2,603. Those businesses have been paying between $135 and $310 per year.

Roughly 70 pharmacies, breweries, laundromats and manufacturing businesses will see their annual fees increase to $9,000. Those businesses have been paying between $600 and $2,180 per year.

About 40 school campuses, aerospace manufacturing businesses and metal finishing businesses will see their fees climb to $5,277. Those businesses have been paying $275 to $1,050 a year.

And 15 businesses that require particularly complex treatment of their wastewater will see the largest spikes. They will now pay $29,903, up from a range between $500 and $5,280.

Those numbers are based on city documents.

Councilmember Vivian Moreno said last week that it’s frustrating that residential customers have been bearing too large a portion of the cost for treating industrial wastewater since the mid-1980s.

Moreno said she supports not hitting the businesses with the entire increase all at once so they can plan for the new cost and slowly absorb it into their budgets.

“I understand the revised fees are substantial and that a phase-in is needed,” she said. “But there’s no question that they simply must be updated.”

That conclusion also was reached by separate city audits in 2013 and 2020. Managers in the city’s Utilities Department mostly ignored the 2013 audit, but they began studying the issue shortly after the 2020 audit.

They released a comprehensive analysis last November that showed how much the fees needed to increase for industrial polluters to paying their fair share of the costs, which is required under state law.

The 2020 audit found that between 2010 and 2019, only 14 percent of almost $40 million in costs was recovered from industrial polluters with permits. The rest, about $33 million, was charged to homes and other businesses as part of their sewer bills.

The Industrial Wastewater Control Program covers 12 other sewer districts beyond San Diego, including Padre Dam, Del Mar, Poway, Spring Valley, National City, Otay, Alpine, Lemon Grove, La Mesa, El Cajon, Winter Gardens and Coronado.

San Diego handles industrial polluter inspections for those sewer districts because their sewage is handled by the city’s Point Loma plant.

The program’s success at keeping arsenic, benzene and other toxic materials out of the ocean is one reason the city has been granted consecutive federal waivers of a requirement to spend $2 billion upgrading the Point Loma sewer plant.

City officials say the potential failure of the program to effectively reduce industrial pollution could jeopardize those waivers in the future.

Once the new rates are fully implemented in July 2025, city officials have agreed to re-evaluate them periodically — at least once every five years.

A separate audit last spring of the industrial wastewater program — not the fees the city charges to pay for it — said the program is understaffed and not capable of handling the larger workload it should handle without adding more workers.

In response to that audit, the Public Utilities Department agreed to make several changes, including modernizing its efforts to find industrial polluters and setting targets for monitoring and effectiveness.