Glendale City Council members on Tuesday said they were open to increasing water rates and changing how they're applied over the next four years despite agreeing with some residents who said the proposal was confusing.
The City Council introduced an ordinance to increase and change rates Tuesday after six months of controversial discussions. Glendale Water & Power officials say the rate increases are needed to pay for needed capital improvements, boost its bond rating and dig itself out of a $21-million deficit on the water side.
Since 2007, rates have increased about 38.8%, but that was after years of no change, said Glendale Water & Power General Manager Glenn Steiger.
However, residential and commercial customers complained that the new rate redesign is too difficult to understand and puts pressure on customers already struggling in tough economic times. Plus, residents said they were irked by increases to meter charges based on the physical size of the meter, something customers don't always control.
“These proposed rates will be a breaking point for my family,” said resident Stephanie Kindelberger, who added that despite the best efforts of her seven-person household, curbing their bill has been unsuccessful.
The Council must give a final OK to the ordinance next week, after which the rates are expected to go into effect April 27.
“I'm not happy putting in a rate increase,” said Councilman Ara Najarian. “But I don't see any other way.”
The plan is to split residential customers into multiple tiers, charging those who use large amounts of water a higher rate. It also puts more of the cost on fixed infrastructure, such as meters, rather than the commodity of water.
Commercial customers won't be tiered, but those with meters that provide water during fire emergencies to their buildings — many of Glendale's biggest 100 businesses — will be charged significantly more for those meters, a change Glendale officials said should have been put in place years ago.
“The rate redesign reflects actual costs of water delivery to each individual class,” Steiger said. “We have not done that in the past.”
The redesign also means the utility will have more fixed revenue that won't fluctuate with conservation as greatly as it has in the past, Steiger said. Residents have complained that they conserved water like the city asked last year, but they're still facing a rate increase due to falling revenues.
The rate increases would occur incrementally over the next four fiscal years. The proposal would give the city a 0.5% revenue boost the first fiscal year, 2% the next and then 4% and 5% in the next two years, according to city reports.
The average residential customer who pays $69.57 per month may see the bill decrease by a few dollars this year, but jump by $6.24, or 8.9%, by 2015 compared to current charges. High-end users, who use more than twice as much water as the average customer and pay $173.31 per month, may see their bill decrease similarly this year, but increase $21.84, or 12.6%, by 2015.
An average 20-unit apartment building with a $972-bill may see their tab decrease this year and in 2015, but less so every year. By 2015, their bill would be about $72 less.
A typical high-rise office building with an average-sized fire meter may see a $423 — or 9.9% — drop in 2012 from $4,776.84 it currently pays, but by 2015, a $288.27, or 6%, increase. High fire-line charges were a sticking point for business owners who said they shouldn't be charged so much for fire lines they rarely use. But officials said it still costs money for the utility to ensure they are ready in case of emergency.
In January, the utility increased rates to keep up with Glendale's wholesale supplier, the Metropolitan Water District of Southern California. The News-Press, in previous reports, has relied on pre-January figures that have been used in recent city staff reports that included “current” customer rates that were outdated.
About 60% of Glendale's water is imported.
“The need for increased revenue is pretty much undisputed,” said Mayor Laura Friedman, who also serves as the city's representative on Metropolitan's board of directors.
It will take the utility about five years to pay for large capital projects, such as reservoir and well improvements, with a pay-as-you-go model, Steiger said. The utility has $60 million in vital capital projects planned over the next five years and $180 million over the next 20.
For decades, Glendale had been transferring millions of dollars from the water side of the utility to the General Fund, which pays for most public services, but stopped that practice last year due to legal implications.