Sierra Madre Sees a Real Surge in Its Water Rates--by 182%

Water bills began arriving this week at Sierra Madre residences and businesses with a whopping 182% increase to pay for years of undercharging and poor accounting in the city’s water department.

The near-tripling of water rates approved by the City Council in July will increase the average household water bill from $18.50 a month plus $3 for a meter to $52.25 a month plus the meter charge, making it one of the most expensive districts in the Southland.

Including the meter charge, the same water usage in Arcadia and Azusa would run $28, in San Marino and Duarte $38, in South Pasadena $37, and in Los Angeles $48.

The city’s businesses and its few large-acreage owners will see hundreds of dollars heaped on their bills, according to city officials.

“We haven’t increased the water rates in years. Foolishly, we cut them last year,” said Councilman George A. Maurer. “The water department has been existing on money from the city and redevelopment agency. And now has come the time to pay the piper.”

The hike has not angered the usual council critics, who agree the city had little choice if it wants to maintain the water department after years of undercharging and mismanagement by a former city administrator.

“What it boils down to is the poor performance of the former city administrator, Jim McRea. He ignored what needed to be done, mingled funds and didn’t increase rates when he should have,” said Caroline Brown, a community activist.

McRea, who led the city for nearly two decades, resigned last October under the cloud of a special auditor’s report that found he unknowingly mismanaged funds, including the water department’s.

The rate for the department’s customers will increase from 74 cents to $2.09 per 100 cubic feet of water.

City officials say the increase is needed to cover the real cost of delivering the water and to cover two loans totaling $1.5 million that the department was forced to take out in June to pay back the city’s sewer fund and redevelopment agency.

The money owed to the sewer fund and the agency plus interest, under state law, had to be paid by June 30, 1994, the end of the fiscal year.

The water department, which is meant to run like a private company, mistakenly spent $468,000 of redevelopment agency money and $797,566 of sewer funds on water main improvements in recent years as a result of poor accounting. “For five or six years, the water department has spent more than it makes, when it should have been paying its own way,” said David Cain, city finance director.

Cain said the good news about the new water rate is that it will go down after the first year and again after five years.

The $2.09 rate includes $1.38 to cover delivery of service, a 49-cent surcharge that will be applied for 12 months to paid off one loan and a 21-cent surcharge to repay another five-year loan.

A low-income exemption is available for the water surcharges, and those who already qualify for an exemption from the city’s utility tax will automatically be exempted from the water rate increase.