Council Tentatively OKs 3.6% Water Rate Increase

By the minimum margin necessary, Los Angeles City Council members on Tuesday gave preliminary approval to a 3.6% water rate increase--reversing their action of just one week ago and paving the way for a complete restructuring of water rates later this year.

The new measure, approved in an 8-7 vote, contains a “sunset” clause so that the increase would expire in a year. The measure also calls for the DWP to present to the council by September a plan for a top-to-bottom revamping of the water rate structure that would provide incentives for water conservation and penalties for excessive use.

“It means we can survive,” said Department of Water and Power General Manager Dan Waters about the narrow approval of a reduced rate increase. The DWP had initially sought an 11% increase in water rates.

Waters said that even with the increase, the utility will have to slash its budget by more than 25% for the next 18 months.

“With it we will meet the basic needs of our customers . . . but we will not be able to do any work to prevent the deterioration of the aging water system,” he said, adding that the department must cut more than $175 million from its capital, maintenance and operations budgets.

The reversal came after council members Mark Ridley-Thomas and Michael Woo changed their votes in favor of a rate hike. Last week, a similar measure was defeated in a 7-7 vote, with one member absent.

Ridley-Thomas, who brought the motion for reconsideration to the council, said he was persuaded to support the rate increase because of his concerns over the possibility of layoffs at the giant city-owned utility and the potential loss of more than $17 million to the city’s general fund if the rate request were denied.

Woo said, “I was prepared to support a temporary rate increase to speed up a radical change in the current rate structure.”

Council member Joy Picus urged her colleagues to vote no, saying it would “give the DWP a green light to stick ratepayers with more of the same,” which she defined as wasteful spending practices.

Still, Ridley-Thomas said he is certain that his thin majority will hold when the measure faces the crucial second reading next Tuesday.

Many council members voting against the rate hike, he said, did so for strictly political reasons. “One said to me, ‘I have to vote no, but I wish I could vote yes and get this over with,’ ” Ridley-Thomas said.

If approved on the second reading, the measure would go to Mayor Tom Bradley for concurrence. Bradley has said he would sign the measure.

The council on Tuesday also gave final approval to a 7% hike in electrical rates, which will add $5.80 to the average bimonthly household bill of $87.20 a month.

The electric rate increase--the first since 1988, when a 4% adjustment was approved--was immediately signed by City Council President John Ferraro in his capacity as acting mayor while Bradley is on an out-of-town trip. The electric rate hike will go into effect in 30 days.

Under the water rate proposal, the charge per billing unit--100 cubic feet of water, or about 748 gallons--would increase to 86 cents from 81 cents. The temporary drought emergency surcharge would increase to 18 cents per billing unit, up from the current 9 cents. The average homeowner uses about 18 billing units per two-month period.

Even with the rate increase, the average homeowner’s bill would actually drop by about $1.74 per billing period, to $24.73 from $26.47 last year. Because of conservation by its customers, the DWP is no longer purchasing water from the Metropolitan Water District. Those charges used to be passed directly to the consumer.

All customers now pay the same rate for water regardless of how much they use. A new structure, to be submitted to the council next fall under the terms of the measure tentatively approved Tuesday, would likely set higher rates for wasteful users and lower rates for efficient users, officials said. At the urging of the DWP, the mayor last year established a 23-member “blue ribbon” committee of business, civic and environmental leaders to develop a new rate structure.

Waters said he believes the committee can complete its work in time to satisfy the council’s requirement. He added that with restructuring, the department will be seeking additional revenues.

Voting for the water rate hike were council members Ridley-Thomas, Woo, Ferraro, Richard Alatorre, Marvin Braude, Joan Milke Flores, Ruth Galanter and Mike Hernandez. Opposing the measure were Picus, Ernani Bernardi, Hal Bernson, Nate Holden, Joel Wachs, Rita Walters and Zev Yaroslavsky.