Burbank utility customers can expect rate increases starting in July after all, as one Burbank City Council member on Monday flipped his vote after city officials said keeping rates stagnant would cause a $7.6 million revenue shortfall and extensive budget cuts this coming fiscal year.
While initially rejecting the proposed increases two weeks ago, Councilman Jess Talamantes on Monday voted in support of raising the utility rates, which put a majority of the council in favor of the hikes.
That means ratepayers will see a 4.75% increase in their water rates, or roughly $3.19 more per month on their bills, which officials have said was driven by hikes in wholesale water costs, as well as the need to pay off bonds used to fund major infrastructure projects, such as reconstructing Reservoir No. 1 and building a recycled-water system.
Utility customers can also expect a 2.5% hike in both refuse and sewer service rates, and a 2.9% increase in electric rates.
“If we do not approve the increase, we’re going to be penny-wise and dollar-foolish because we’re going to be kicking the can down the road,” Talamantes said at the meeting Monday. “We’re going to be in this same situation a year from now.”
Mayor David Gordon and Councilman Bob Frutos remained against the utility rate increases.
“It’s going to hit (ratepayers) in the pocketbooks; we have people on fixed incomes, unemployed, underemployed, struggling to meet their household expenses,” Gordon said Tuesday. “At the same time, we are raising rates.”
The move to reconsider increasing rates came after city officials proposed a series of budget cuts to recover the potential $7.6 million shortfall, which would have mostly impacted utility funds. Options included getting rid of water conservation programs to the tune of $530,000, eliminating planned broadband services to schools and cutting community support funding.
City officials had also suggested reducing the annual money transfer — which this coming fiscal year amounts to $1.3 million — from the water fund to the General Fund in lieu of property taxes, a long- standing practice that’s the subject of a pending lawsuit against the city. A hearing on the matter is slated for September.
In a 3-2 vote, the council opted to increase the rates and avoid making such cuts.
“I think our cost increases, while we wish there were none, they’re well within reason given the cost escalation that occurs in those utilities,” City Manager Mark Scott said Tuesday.
Also on Monday, the City Council in a 4-1 vote adopted the fiscal year 2014-15 budget, which includes the $151-million General Fund, which pays for most public services. Gordon was the sole dissenter.