The city’s water rates may soon be divided into multiple tiers based on the amount of water customers use. The change could come in the wake of a plan endorsed Tuesday by the City Council. If ultimately approved, the plan would boost revenues to erase $13.5-million worth of red ink and pay for badly needed infrastructure improvements.
Under the plan, the biggest water users likely will see higher rates, while those who use the least could actually see their bills reduced. City Council members also said they favored rate changes that would increase Glendale Water & Power revenue incrementally through 2015, starting with 2% the first two years, 4% the third and then 5% in the final year.
The rates changes could go into effect starting in March.
Officials say the additional revenue is needed to replenish a $13.5-million deficit for the water utility, where accelerated capital expenditures have outpaced revenue in recent years.
Reduced water use due to conservation efforts, as well as smart-grid costs, have also been a drag on Glendale Water & Power’s ability to keep pace with costs, according to a city report.
The initial incremental changes endorsed by most council members Tuesday were smaller than utility officials had proposed — they wanted revenue boosts of 3% each year — because council members were uneasy about how customers would be impacted amid the lingering recession.
Councilman Dave Weaver favored an immediate increase of 3%, arguing that his colleagues were passing the buck.
“If things like this are too much, then you better move to a place where you can afford it — if you can find one,” he said.
Councilman Rafi Manoukian, meanwhile, refused to vote for an increase prior to receiving additional financial reports.
Under the proposal, single- and multi-family residences are to be divided into five and three tiers, respectively. The tiers reflect the costs of groundwater versus more expensive imported water from the Metropolitan Water District of Southern California, which is expected to raise rates again soon.
Under the option preferred by the City Council, an average single-family residence may see its monthly bill drop to $59.65 from $63.78 in the first year, while a high-scale user would see an increase from $158.05 to $164.30, according to a city report.
By 2015, average users would see bills increase by about $7.35.
In addition to raising rates, officials said a $60-million water bond was necessary to pay for capital projects, such as increasing water flow in Adams Hill, where pipes are more than 80 years old.
But that got pushback from some on the City Council dais.
“How badly do we need to do some of the [capital improvements]” Councilman Frank Quintero asked, calling for an independent review of the planned projects. “I don’t see Glendale is going to fall apart.”
In 2008, Glendale Water & Power issued a $50-million bond — all of which has been spent, with $33 million covering the reconstruction of the Chevy Chase Reservoir. Following the 2012 bond, the utility expects to pay for future improvements with cash on hand, according to a city report.
The council shelved voting on a bond until after the final vote on the rate increase.
Water customers will get a notice of the proposed change in coming weeks. They will have 45 days to contest the plan before the matter comes back for a final vote, said Glendale Water & Power General Manager Glenn Steiger.