San Diego approves settlement over sewer repairs, maintenance

June 13, 2006

The city of San Diego will continue to upgrade its sewage collection system over the next year under a partial legal settlement with environmentalists that was unanimously approved by the City Council yesterday.

Under the terms of the settlement, which runs through June 30, 2007, the city will spend about $32 million to replace and fix sewer pipes and $50 million to clean pipelines and perform other maintenance to prevent sewer spills.

Both amounts are included in the city's recently approved fiscal 2007 budget and will not trigger any increase in sewer rates, said Scott Tulloch, director of the Metropolitan Wastewater Department.

The council also approved payment of $309,923 in legal fees to the Coast Law Group, an Encinitas law firm that sued the city on behalf of the Surfrider Foundation and San Diego Coastkeeper. Councilwoman Donna Frye abstained from the vote on the legal fees because her private attorneys work for Coast Law Group.

The two environmental groups sued the city in March 2001 under the federal Clean Water Act to force San Diego to spend more money on its aged sewer collection system.

Since the lawsuit was filed, sewage spills have dropped from 365 per year to about 60 annually, a decrease of more than 83 percent, Coast Law Group attorney Marco Gonzalez said.

“This is a huge success story for the city,” said Bruce Reznik, executive director of San Diego Coastkeeper.

The city has tentatively agreed to a final settlement that would require San Diego to spend $163 million annually on sewer capital projects and $50 million annually on maintenance through 2013.

Both sides have agreed to postpone the final settlement until the city is on more solid financial footing and is capable of issuing bonds to finance the extensive sewer system improvements.

The partial settlement approved yesterday allows the city to continue to make progress on its sewer system but without having to borrow money for the improvements at private market rates, which are more expensive than traditional sewer bonds, Gonzalez said.

The council also voted unanimously yesterday to allow some proceeds from the sale of up to $900 million in bonds to be used to reimburse the city for current expenses from sewer and water system projects.

Seeking such permission in advance of a bond sale is required under federal treasury regulations, city officials said.

The city has been unable to receive favorable rates on bonds for two years, because of ongoing investigations, but a city report notes that the sewer and water bond sale could occur in the 2007 fiscal year, which begins July 1.

The city ended its last attempt to sell sewer bonds in September 2003 in the wake of accusations that officials had offered misleading financial information in support of the deal.

Staff writer Jennifer Vigil contributed to this report.

About Coast Law Group

Coast Law Group LLP is a community-conscious law firm which provides innovative solutions to best achieve clients’ goals and objectives.  To learn more about the firm and its broad range of legal services, log on to www.coastlawgroup.com.

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