Burbank City Council discusses utility rates

A week after voting against proposed water and power rate increases, the Burbank City Council on Tuesday discussed what money-saving measures could help cover millions of dollars in rising operating costs including the possibility of still raising fees, but not by as much as initially proposed.

The vote at the previous meeting rejected price hikes of 2.9% for electricity, 4.75% for water services, 2.5% for refuse service and 2.5% for sewer services.

But keeping the rates flat would create a $7.6 million deficit for the upcoming 2014-15 fiscal year for the Burbank Water and Power Department, prompting a series of potential cuts.

Ron Davis, director of the utility, told the council that the department’s cash reserves would be quickly depleted if it was depended on to subsidize the rates.

A utility staff report shows that reserves are currently at $32.2 million, but could fall to $16.8 million by 2018-19.

Davis said utility rates cannot be subsidized at that annual level and increases in prices, which are lower than ones in neighboring communities, are more reliable to pay for rising operating costs.

“We don’t need things like that, we can manage it at 2% or 3%,” he said.

Councilman Gary Bric, who voted in favor of rate increases last week, did his own math to break down the new fees and said 28 cents a day should just about cover all utilities for Burbank residents.

“The cuts we’re going to have to make tonight affect so many things in the city in my opinion,” he said.

Bric added that speaking just in percentages is when consumers start to get worried.

All council members told city and utility staff they do not want to layoff personnel to help cover costs.

Mayor David Gordon, an opponent of fee hikes who voted against them at the last council meeting, said he’d be open to, for example, increasing electricity fees by 1.5% instead of the initially proposed 2.9%.

“I would entertain a discussion of that possibility to close some of the gap,” he said.

Staff presented a series of potential services that could be cut from each utility, such as $326,000 worth of nonmandatory travel for utility staff.

Other options include, eliminating broadband services to schools, which would save $250,000 or doing away with water conservation programs, a cut that could save up to $530,000.

The council will return next Monday to further discuss what could be done about the rates.

City Manager Mark Scott said on Friday that he’s already prepared an updated line item list of cuts, including stepping back the proposed rate increases to 2.15% for electric, 2.4% for water, 1.5% for sewer services and the refuse rate would remain unchanged.

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Follow Arin Mikailian on Twitter: @ArinMikailian.

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