Metropolitan Pass-Through Adjustment

Nearly 40% of the District’s operation and maintenance expenses are comprised of charges by the City of San Diego for treatment and disposal of sewage through the City’s Metropolitan Wastewater System (Metro).  The costs to operate and maintain the Metro system are paid by 13 agencies that utilize the system based on the proportion of sewage discharged by each agency.  If the City’s operating costs increase, those increased costs are charged to all agencies which use the Metro system, including the District.  To help wastewater agencies deal with changes in wholesale charges for sewage treatment, which are beyond the control of the agency, the legislature enacted Government Code Section 53756.  This section authorizes sewer agencies to make automatic adjustments to sewer rates that “pass-through” any increases, or decreases, in wholesale charges for wastewater treatment.

On May 24, 2023, the District Board of Directors adopted Ordinance No. 10850 which, pursuant to State law, authorizes the pass-through of increases in wholesale charges for wastewater treatment (i.e. Metro charges).  Several agencies that use the Metro system have enacted similar pass-through provisions.  The ordinance enables the District to increase its adopted sewer service charges by the amount of future cost increases imposed on the District by the City for operation of the Metro system, without requiring a Board action to adjust rates.  The pass-through ordinance is limited by Government Code section 53756 to a term of five years.

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