Mayor Offers Water Rate Proposal That Rewards Those Who Conserve : Drought: O’Connor’s plan would freeze prices for 30% cutbacks and give rebates for savings of 50%.

San Diego Mayor Maureen O’Connor, contending that the city must reward its residents for voluntarily cutting back on water consumption, Thursday proposed a new pricing structure that would freeze water bills for households that conserve by 30% and provide rebates for families achieving a 50% savings.

But O’Connor’s plan would penalize anyone who fell short of the 30% goal by assessing an undetermined “drought surcharge” on every gallon of water consumed. It also proposes to at least double water prices for consumers who use more than 600 gallons daily--like O’Connor herself--and make them ineligible for the conservation discount.

“Such a program is simple, fair to all and maintains our successful voluntary approach while recognizing the economic impact of the drought on our water utility system,” the mayor wrote in a memo to City Council members.

“The savers benefit, those who must use out of necessity can make the requisite economic decision, and the city can focus its efforts on the few who might continue to ignore the need for conservation,” she added.

The initiative is a new addition to O’Connor’s continuing, single-handed campaign to avoid mandatory water restrictions for San Diego residents. The San Diego County Water Authority voted March 14 to impose mandatory water-use prohibitions on the city of San Diego and the county’s 22 other water agencies. The San Diego City Council is scheduled to vote on a variety of water policies, including a new pricing schedule, Tuesday.

O’Connor has called on the city to achieve a 30% water savings by the end of March or face mandatory controls. The mayor also is attempting to persuade the state Department of Water Resources, the Metropolitan Water District and the county Water Authority to ease their mandates for a 50% cutback in water consumption by San Diego County residents.

O’Connor believes the city’s commercial and industrial sector cannot reach those goals without layoffs and causing damage to the economy. She also maintains that recent heavy rains and snows make such drastic cutbacks unnecessary.

In concept, the mayor’s proposal differs little from the tiered price schedule proposed March 12 by City Manager Jack McGrory, which also rewards conservation with lower rates and punishes those who don’t achieve cutback.

But O’Connor’s proposal would be “tough to administer” because of difficulties comparing consumption today with 1989 water use, said Roger Frauenfelder, deputy city manager in charge of the city’s Water Utilities Department.

Homeowners who used large amounts of water in 1989 would find it easier to achieve the 50% savings, and thus win themselves a water discount, Frauenfelder acknowledged.

Michael Parrish, one of the city’s 10 representatives on the Water Authority said discounts and frozen rates also might take revenue out of the Water Utilities department’s pocket, funds officials have said are badly needed for water projects.

But O’Connor said it is more equitable to hold off on water projects or lay off city workers than to force private businesses to bear the brunt of increased costs even as they are conserving.

The average single-family homeowner uses about 349 gallons of water each day and pays $16.80 a month for it. Consumers who use more than 600 gallons daily represent less than 20% of all residents, Frauenfelder said.

But residential consumers use only about half the city’s water. O’Connor acknowledged that a pricing plan must be developed for commercial and industrial users.

O’Connor proposes to begin the pricing structure with March savings results, which have reached 34% to date, and continue month-by-month comparisons into the future. Residential users have actually saved 47% during this unusually rainy month, but commercial and industrial consumers are pulling the average down, she said.