Council to Reconsider Water Rate : Politics: Lobbying by Bradley and Ferraro revives proposal for an increase, which would be tied to a restructuring of rates.

After a lobbying campaign by Mayor Tom Bradley and Council President John Ferraro, City Council members on Wednesday voted to reconsider a 3.6% water rate increase that they rejected just a day earlier.

Faced with the prospect of hundreds of layoffs at the Department of Water and Power and a loss to the city treasury of more than $17 million in funds from the utility, Bradley, Ferraro and a group of city analysts worked behind the scenes to persuade the council to back away from its earlier vote.

As a result of those meetings, City Councilman Mark Ridley-Thomas on Wednesday brought forward a new proposal that would allow the proposed 3.6% rate increase to be imposed--but with a “sunset clause” that would cause the rate hike to expire in one year.

The proposal would also require the DWP to present to the council by September a plan for a complete revamping of the water rate structure, requiring big water users to pay “their fair share of the financial burden” and providing incentives for water conservation and penalties for excessive use.

The council voted 10 to 4 to take another look next week at a rate proposal that was defeated in a 7-7 vote on Tuesday.

Ridley-Thomas, who initially had voted against the rate hike, said he was persuaded to call for a reconsideration in part because of his concerns over the possibility of layoffs.

“I know that the people I represent are the last hired and the first fired,” said Ridley-Thomas, a Bradley ally who represents the 8th Council District in South-Central Los Angeles.

Ridley-Thomas also said he felt it was necessary to tie a proposed increase to a restructuring of rates. “This will give us a more substantial hand in rate restructuring,” he said.

Currently, all customers pay the same rate for water regardless of how much they use. A new structure would probably set higher rates for large or wasteful users and charge less to small and efficient users, officials said. At the urging of the DWP, the mayor last year established a 23-member committee of business, civic and environmental leaders to develop a new rate structure.

DWP Commission President Mike Gage said, “I believe we can take the action they have asked us to take.” Dan Waters, DWP general manager, said the department has planned all along to have a new rate structure proposal ready by the fall.

The DWP board of commissioners has scheduled an emergency meeting for Friday morning to consider the Ridley-Thomas proposal.

Deputy Mayor Mark Fabiani said that Bradley made his appeal in an effort to find a long-term solution to the politically sticky problem of recurring rate increase requests.

“What the mayor really wants to do is reform water rates,” said Deputy Mayor Mark Fabiani.

“The mayor believes that restructuring can solve many of the problems that appear every time” there is a need for more revenue at the department, he said. “Unless (the DWP) can restructure rates in a timely way, this small increase will disappear.”

Bradley, who had not previously taken a public position on the rate hike, also “believes this small rate increase is essential to maintaining the city’s water system,” Fabiani said.

Ferraro, who had been one of the strongest supporters of the rate increase, said he made the last-ditch attempt to revive the revenue measure because of his concerns about the long-term security of city’s water supply and quality.

On Tuesday, the rate increase requested by the DWP fell one vote short of approval. But the change in opinion by Ridley-Thomas could tip the balance in favor of the measure.

The four who voted Wednesday against reconsideration were Zev Yaroslavsky, Joy Picus, Hal Bernson and Ernani Bernardi.

Council members Michael Woo and Rita Walters voted in favor of reconsideration on Wednesday after initially opposing the rate increase.

Yaroslavsky, who was one of the leading critics of the rate hike, said he favors restructing of rates but said, “At this point I have no plans to change my vote.”

Without the rate hike, the department would be forced to cut nearly $200 million in capital projects and other expenses and lay off hundreds of employees, officials said.

With water sales down about 30% because of the drought, the utility was facing a $98-million deficit in its water operations, officials said. In addition, the department faces escalating costs because of new state and federal water quality standards and the need to update an aging infrastructure.