Morning Report: To Raise or Not to Raise Water Rates

The San Diego City Council will decide today whether to raise water rates for 1.4 million people… no big deal.

Except that it very much is, according to San Diego’s independent budget analysts, who warned in a report last week that not raising water rates would result in huge budget cuts, lay offs and defaults on loans at the Public Utilities Department.

The proposal: a four-year 63 percent water rate hike and a 31 percent wastewater rate hike. If it passes, it will be the latest in a string of fee increases in San Diego over the past several months as the city grapples with a structural budget deficit.

Ahead of the vote, our MacKenzie Elmer sought out to understand what would happen if things really went left and the city decided to stop paying its bills to the San Diego County Water Authority, which supplies around 90 percent of the city’s water resources.

Would the Water Authority just shut our water off?

No, the Water Authority’s general manager assured Elmer, but the fallout would be pretty bad. A late fee on San Diego’s monthly $27 million bill would equal the cost of a nice condo, Elmer writes, which is money the city doesn’t have.

Read more here.

Water Authority board member says city should pause Pure Water: In a late commentary Monday night, Jim Madaffer, a member of the Board of Directors of the Water Authority writes the city should pause planning of Phase 2 of the now nearly 20-year effort to pursue wastewater recycling.

San Diego County’s ADU Affordability Scramble

State and local government leaders have rallied behind accessory dwelling units in recent years with the hope that they can chip away at the state’s housing crisis. 

The challenge: nailing down whether yet-to-be built ADUs will actually be affordable.

ICYMI, our Lisa Halverstadt reported yesterday on the county of San Diego’s reliance on ADUs to help meet state housing goals for areas outside cities. 

She also spotlighted the county’s attempts to gauge where rents might land for ADUs since their owners didn’t formally commit to offer rents affordable to low-income or middle-class residents.

The latest tactics: A county planning official said his team used Zillow data on 30 existing ADUs to come up with an estimated breakdown of rents that the county applied to newly permitted ADUs in 2024. The county also relied on the results of a 2021 study  to estimate how many ADUs would end up serving as free homes for friends or family members. These units – deemed “no cost” in the study – ended up making up the vast majority of ADUs that the county classified as very low income last year.

Rami Talleh, deputy director of county planning and development services, acknowledged these methods aren’t ideal but said the county is doing the best it can with the information it’s got.

Atkins Out; Padilla In?

Former San Diego State Sen. Toni Atkins has dropped out of the crowded 2026 California governor race saying in a statement that there was no path to victory for her. She did not endorse any candidates and does not plan to run for another office. (Union-Tribune)

Sacramento Bee: “While Atkins had a sizeable campaign war chest of $4.2 million, her fundraising was lackluster during the first half of the year.”

CalMatters: “Atkins faced steep odds in name recognition having never run for statewide office before. She came in third last in an August Politico poll, with just 4% of voters picking her among the Democrats.”

Another candidate coming in? U.S. Sen. Alex Padilla was in San Diego last week raising money. He went to at least three events including on Wednesday at Kaluu. Most of the money raised would support his future and other senate campaigns but seems like the kind of thing a candidate for governor may do.

Politifest: How Can We Build More Housing People Can Afford?

San Diegans know the pain of high housing costs. Not only is the region short on homes, but the ones that do exist are increasingly out of reach for many families.

It’s led to many people leaving their communities in search of affordability.

At the Politifest on Oct. 4 at University of San Diego, we’ll explore one of the region’s toughest questions: How can we create more housing in San Diego that people can afford?

Panelists include Ricardo Flores from the Local Initiatives Support Corporation (LISC) San Diego, Stephen Russell from the San Diego Housing Federation and Sean Kilkenny, a partner at Nolen communities. They’ll present their unique solutions, discussing factors like zoning, state legislation, construction costs and more, before debating which ideas could make the biggest impact.

You won’t want to miss this one. Get tickets here.

In Other News 

• Correction: Yesterday’s Morning Report misstated the county’s progress on state housing goals. It has permitted more than three quarters of the new homes the state called for in unincorporated areas by 2029. 
• The Trump Administration announced plans to build 10 miles of new barriers along the San Diego-Mexico border. (NBC 7)
• University of San Diego faculty members have approved their first union contract, applying to about 200 non-tenure-track faculty in the university’s College of Arts and Sciences. It includes wage increases, back pay and job security. (KPBS)
• San Diego County supervisors Paloma Aguirre and Terra Lawson-Remer today plan to renew their effort to declare the Tijuana River Valley an environmental Superfund site. They will ask county staff to seek state funds for a comprehensive pollution study of the river, a requirement for asking federal authorities to declare the river an environmental disaster area.

The Morning Report was written by Tigist Layne and Lisa Halverstadt. It was edited by Andrea Sanchez-Villafaña. 

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