Drought Eases, but Water Woes May Still Loom : Environment: Business leaders call for conservation to continue as the county improves its water, sewage systems.

It has been a year since local water authorities shocked San Diego County businesses by considering an unprecedented 50% cutback in deliveries.

Fortunately, last year’s wetter-than-average “miracle March” washed away the need for severe cutbacks. And, last week, the San Diego County Water Authority said that higher-than-average rainfall in February meant that the county’s voluntary water conservation goal could be lowered from 20% to 10%.

Yet, despite the rosier outlook, San Diego business leaders argue that the county shouldn’t return to business as usual.

“We were lucky,” said Dan Pegg, president of the San Diego Economic Development Corp. “The drought underscored the fragile nature of our water supply,” both for companies that do business in San Diego as well as those that look to the area as a place to do business, he said.

Pegg pressed county water authorities to correct supply and distribution shortcomings that were exposed during the drought. “I certainly hope that we don’t wait until the next crisis to deal” with potentially expensive maintenance and expansion issues, Pegg said.

Although water authorities are relaxing voluntary restrictions, they insist that the drought is not over.

“We are concerned that some of the headlines have been saying that the drought is over,” said Lester A. Snow, general manager of the water authority. In relaxing the voluntary restrictions, he said, “we don’t want to give the message that conservation is over.”

“If what we’re doing now is declaring victory in the war over water . . . we would be making a mistake,” said Raford Boddy, a San Diego State University economy professor.

Boddy said that San Diego’s business community needs to know in advance how local authorities will respond when water supplies are again threatened by drought.

“The core message is this: settle the allocation arguments now, while you’ve got water,” Boddy said. Lack of planning for shortages will be “troubling” because industrial and commercial water customers can’t plan for the dramatic supply cuts that almost occurred during 1991, Boddy said.

Had severe water delivery cuts occurred in 1991, every company that got cut would not wait to see what water authorities would do about shortages the second time around, Pegg said. “They would have packed up their bags and moved to where they would be sure of supplies.”

Despite last year’s threatened 50% cutback--and resulting nationwide media attention--no companies are known to have left town because of the drought, Pegg said. And, no out-of-town firms are known to have abandoned plans to relocate in San Diego, Pegg said.

The drought generally proved that the local water delivery system is functioning fairly well, Pegg said. Pegg based that assessment on the fact that, even during the worst drought in recent memory, mandatory cuts were not imposed on industrial and commercial customers.

The fact that mandatory cuts weren’t needed last year was in part because of conservation programs pieced together by industrial and commercial water customers.

After last year’s “Miracle March,” the city of San Diego instituted a voluntary 20% water use cut. Residents responded by cutting use by nearly 30%, said Marsi Steirer, San Diego’s water conservation supervisor. Industrial and commercial water users “are to be congratulated for embracing water conservation,” Steirer said.

Steirer said industrial and commercial customers are likely to encourage even more conservation “because they know that they are paying for water coming in and also as they discharge into sewers.”

Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group, said industrial and commercial water customers will have to “become more water-efficient. . . . They will have as much water as they need . . . but, if they wish to use water as inefficiently as they have in the past, then they will have to pay for that privilege.”

Similarly, Pegg said rates are likely to go up as water and sewage systems are upgraded. But Shames and Pegg disagree on how costs of those improvements should be allocated.

Shames suggested that industrial and commercial users are better equipped to handle increased water and sewage rates than residential customers.

But Pegg said that recession-weary businesses can’t afford to carry the burden. “Many companies are teetering on the threshold of leaving as it is now,” Pegg said. “Another financial setback for them won’t be welcome.”

Boddy, however, was uncertain that higher rates would necessarily chase away business.

The argument, Boddy said, is that, if businesses are charged what water and sewage systems are worth, then they probably wouldn’t locate here. “I think business can and will absorb the costs,” Boddy said, “if we can find out what the real costs are.” What business can’t survive, he said, “is being subject to the whims of last-minute political demands.”

During a March 12 meeting, the County Water Authority said the 10% voluntary reduction will probably remain in effect until a sixth water pipeline is completed in 1997. However, a rate increase that had been scheduled for July 1 is being delayed because of the stalled economy.