Customers Want Say in Water Rates : Utility: A rate dispute leads an insurgent group to back its own candidate for the Lincoln Avenue Water Co. board at Monday’s shareholders meeting.

When Richard and Priscilla Benson started asking questions last year about the rates their water company was charging, they felt the responses were abrupt.

“We were just shareholders interested in making better use of ground water,” said Richard Benson, 45, a Jet Propulsion Laboratory engineer. “The company was saying, ‘We don’t want your input, leave us alone.’ ”

Now, the couple find themselves leading an insurgent group of customers, Concerned Shareholders of Lincoln Avenue Water Co., which is trying to get its own candidate elected to the company’s board of directors.

Such protests by water company shareholders are unusual, said Marvin Cichy, a board member of the Upper San Gabriel Valley Municipal Water District. “You almost never see it happen,” he said. “Nobody wants the hassle of running the company.”

With 4,200 customers in northwest Altadena, Lincoln is one of dozens of small mutual, or shareholder-owned, water companies sprinkled across Southern California, some with as few as 100 customers, Cichy said.

With the backing of the shareholders’ group, attorney Ray Towne will challenge Robert W. Horner, a board member since 1966, at the company’s annual meeting on Monday. It is the only seat up for election on the five-member board.

Company officials write off the Bensons and their allies as large landholders who want more than their share of the company’s water. “They want their land to be green as a football field with somebody else subsidizing them,” Lincoln General Manager Bob Hayward said.

The dispute started last July, the couple say, when they found their monthly water rates had doubled. Richard Benson, whose wife describes him as “a numbers junkie,” checked into the rates of nearby water companies and found Lincoln among the highest.

Hayward, though, says there are good reasons why the company charges an average of $35.38 a month, compared with Pasadena’s $12.01.

Because of contamination of local ground water, Hayward said, the company must buy water more expensively from other areas through the Metropolitan Water District. “About 75% of the water Lincoln supplies to its customers has to be purchased,” Hayward said.

Pasadena, which has had its own treatment plant for two years, uses a much lower proportion of purchased water, he said.

The Bensons, however, say that, if Lincoln were well managed, it could have negotiated with JPL for financial help in building a treatment plant, as Pasadena did.

In 1990, JPL acknowledged it probably had played a role in ground-water contamination in the Arroyo Seco area of Northwest Pasadena, next to Altadena. JPL agreed to pay more than $3 million to help Pasadena solve the problem.

Lincoln officials say they expect to spend $250,000 this year for their own treatment plant.

The insurgents’ major complaint has to do with the “two-tiered” pricing structure, with larger landholders paying higher rates. Regardless of how much land they own, customers are being charged at a rate of $1.14 per unit (100 cubic feet of water) for the first 15 units used, and $2.28 for each succeeding unit.

But the Bensons and others say that large landholders don’t carry a disproportionate amount of the billing.

Each customer owns a share in the water company for every fifth of an acre of land or fraction thereof. The Bensons own about 1 1/4 acres, for which they receive seven shares. They contend that they should be allowed to have 15 low-cost units per share, rather than just 15 units for their entire property.

“In 1987, we bought our dream with an acre of yard,” Richard Benson said. “We put every penny we had into it, giving up new cars and vacations so we could have fruit trees in our back yard and our kid could ride a pony.”

The new pricing system skewed the company’s bills in favor of people with small lots, he says. Before the Bensons decided to let their lawn die and cut back on other water uses, they were getting hit with bills last summer of as high as $400 a month, he said.

Company officials say that allocating 100 units of low-priced water to one family and only 15 to another, on a small single-family lot would be unfair. “It would penalize the families who were able to maintain their household on less than 15 units a month,” Hayward said.

The company’s critics say the Lincoln board has thrown obstacles in the way of their trying to get Towne elected. Under company bylaws, those who are still paying mortgages on their property must get proxy permission from their lending institutions before they can vote.

The meeting will be at 7:30 p.m. Monday, at the Loma Park Auditorium, 3330 N. Lincoln Ave.