Meeting on Sewer Rates Likely to Get Down, Dirty

His co-workers at the Bureau of Sanitation refer to him as “poor Shahram.”

An engineer with a PhD in fluid dynamics, Shahram Kharaghani once had the misfortune to be assigned a project that was supposed to last one year.

Nearly nine years later, Kharaghani is still toiling over the city’s sewer rate structure, seemingly unable to extract himself from an issue so complex, so endlessly controversial, that even last year’s total overhaul of sewer rates in the city has not put the matter to rest.

“This is something I wanted to forget and finish,” he said mournfully in a recent interview.

Kharaghani’s dilemma resembles that of the whole city Wastewater Program, part of the Bureau of Sanitation. The bureau has for years been a flash point for some of the city’s bitterest political battles, even though recent debates have concerned costs amounting to only a dollar or two per month per user.

Sewer rates have come to symbolize general discontent with city government, “a rallying cry for why we should consider being our own city,” said Jeff Brain of Valley VOTE, a group working to study secession of the San Fernando Valley.

Neither the bureau’s cost-cutting, nor its tinkering with rates, nor its cleaning up Santa Monica Bay has spared it from political criticism. If anything, a combination of factors--ranging from a national trend toward sewer privatization to El Nino rains--has worked to increase pressure on the bureau.

Today, the City Council will meet in Northridge to debate the sewer system yet again. The meeting is expected to be well attended, both by angry homeowners and by Valley VOTE supporters.

City Councilmen Joel Wachs and Hal Bernson plan to use the meeting as a forum to go on the offensive against the utility. Bernson is seeking additional changes to the rate structure.

Wachs is pushing for an outside audit of the sewer utility that he calls wasteful and inefficient. “There is no question but that the city’s sewer services are totally out of control,” Wachs said.

The sewer rate controversy originates in drastic rate hikes in the late 1980s, contends Ann Giagni, the utility’s director of financial management. The hikes more than quintupled costs for city residents.

Most other cities in the country have passed similar increases, and Los Angeles sanitation officials contend the city still charges less on average than most major cities for sewer service.

One reason for the hikes is the Clean Water Act, which unleashed a flurry of federal court orders against cities in the late 1980s requiring big investments in waste treatment to prevent sewage from fouling oceans and streams.

In Los Angeles, a whopping $2.2 billion has been spent since a 1987 court order calling for improvements to the Hyperion Treatment Plant. Ratepayers will be saddled with this bill for decades to come.

The improvements decreased the plant’s pollution discharged into Santa Monica Bay by 90%, to the point where the amount is now less than it was in 1910, although the city’s population is now 20 times larger, said John Crosse, assistant sanitation director.

One particular change by itself--treating sludge on land instead of dumping it--has reduced overall contaminant levels in the bay by one third, said Steve Bay, toxicologist with the Southern California Coastal Waters Research Project.

But the improvements didn’t come without controversy. In 1996, ratepayers slapped the utility with a lawsuit that drags on to this day.

“The more [rates] increased, the more concerned I got,” explained retired civil servant Ivan Shinkle, a North Hollywood resident who is one of the plaintiffs.

Wachs has long accused the utility of using the Clean Water Act to cloak wasteful practices. “There was a blank check mentality,” he said. “They didn’t have to buy Cadillacs when they should have bought Chevys.”

Missteps during the upgrade didn’t help the utility’s case. For example, an energy recovery system at Hyperion never worked right, and was mothballed after it was built at a cost to ratepayers of about $40 million.

Judith Wilson, the new director of the Sanitation Bureau, called this “ancient history.”

But the legacy of this era lives on. As controversy over sewer rates reached fever pitch, the City Council last year approved a measure to completely revamp the rate structure.

Instead of relieving pressure on the utility, though, the change has only served to keep the political fires burning.

Unlike fees for water, fees for sewer use are not based on meter readouts, but on guesses based on how much water residents use.

The old rate structure assumed that about 60% of the water used in a home went down the sink or toilet, and into the sewer system. But this lumped people who used more than than 60% of their total water consumption to water lawns with people who didn’t even have lawns. The result was that the people with bigger lawns, including many San Fernando Valley residents, ended up paying a bigger share.

By contrast, the new rate structure, drafted by City Councilwoman Laura Chick, takes into account only water use from the previous winter. The idea is that people use less water on their lawns in winter because it rains, so water use during that period is a more accurate indicator of sewer use.

For those not satisfied with this, the utility now also allows consumers to buy their own meters to measure indoor water use.

The new system, which Kharaghani helped develop, shifted the distribution of costs by an average of a couple dollars a month per user. In general, Valley residents benefited from the change at the expense of residents of older areas of the city such as South-Central, which bitterly divided the City Council. During one point in the debate, seven council members stormed out of the session in an unprecedented protest.

Since then, Kharaghani said, complaints about rates have gone down.

But they haven’t gone away.

Consumers are more confused by the new system, which is based on arcane calculations. To make matters worse, heavy El Nino rains decreased water use this year, so many ratepayers were baffled to get bills in which their sewer use--which reflected their previous winter’s water use--was higher than their current water use.

Other homeowners used large amounts of water on their lawns last winter despite the rain, and got big rate hikes as a result.

In addition, computer peculiarities make bills appear to list a higher sewer rate per unit than a year ago. Actually, sewer rates have not increased since 1992. Previous bills did not list the full cost, but rather 60% of it. New ones use the complete figure.

So Councilman Bernson, who represents the northwest San Fernando Valley, is likely to please many constituents when he calls the new system “another flimflam to get more dollars.” He has introduced a motion to be heard today that would give extra breaks to people who own large lots.

Bernson wants to get rid of a $20-million-per-year franchise fee charged to the utility by the city in 1996 to plug budget holes in the general fund. This fee, which represents an average of $1 per ratepayer, is also the subject of a second lawsuit by ratepayers.

More fundamental changes are sought by Wachs, with Bernson’s backing, who seeks to uncover waste and duplication in the utility through an outside audit.

“Rather than pit one part of the city against another over small amounts of money, why not have everyone benefit from savings in the whole system?” Wachs asked.

Wachs’ words are likely to carry more weight because of recent cuts to the Department of Water and Power’s budget, a trend which suggests other utilities may be ripe for cuts.

Also working in his favor is a nationwide trend of privatization of sewer utilities that advocates say shows that costs can be cut substantially. Adrian Moore of the Reason Public Policy Institute, a privatization-oriented think tank, said that scores of cities, including Indianapolis and Milwaukee, have recently privatized their utilities, and saved money.

Privatization pressure stems in part from the high costs of repairing aging sewer infrastructures nationwide.

Los Angeles is no exception: Sanitation director Wilson said the city’s 80-year-old sewer lines need $1 billion of repair work in the next decade.

But Wilson, a former MTA executive officer who joined the utility in September, said the sanitation bureau is not a bloated bureaucracy--”and I’ve seen ‘em, believe me,” she said.

Spurred on by growing capital costs, the utility has already cut its operating budget by 30% in the last four years, and aims to cut it by another 15%, she said. Wilson has also started a study in which the department compares its costs to those of other utilities to ensure that city residents are getting good rates.

None of these arguments, though, is likely to satisfy the utility’s critics.

Nor are they likely to make Kharaghani’s job much easier as he is called on to speak before the council today, as one of the bureaucrats in the center of the storm.

“I have not tried to create a perfect system. You can’t,” he said, in a tone of carefully suppressed frustration. “My job is to create the best and fairest system. That’s what I’ve tried to do.”

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The Los Angeles City Council meets today at 10 a.m. at St. Nicholas Grande Ballroom, 17037 Plummer St., Northridge.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

City Sewer Rates

A study conducted earlier this year of selected cities found that Los Angeles residents pay far less, on average, than those of many other metropolitan areas.

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City Average monthly bill San Francisco $63.59 Boston $51.62 Philadelphia $34.80 Dallas $34.14 Denver $21.45 Los Angeles $20.50 New Orleans $17.57 Salt Lake City $12 Memphis $8.58

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Source: City of Memphis