By Jason KUROSU
The Glendale City Council discussed the establishment of a four-year water-rate plan, which city officials say will make up the difference from years of miscalculated rates leading to lost utility revenue and mischarging of GWP customers.
In 2011, Willdan Financial Services, a financial consulting firm, calculated rates for Glendale that were later found to be flawed. Since then, the city has filed a lawsuit against Willdan for the lost revenue.
Glendale City Manager Scott Ochoa described the situation which led to undercharging of single and multi-family homes and overcharging of customers with fire lines greater than four inches.
“[Willdan] got it extraordinarily wrong, to the tune of us undercharging and under collecting about $8 million plus. Conversely, we severely overcharged on the fire lines.”
The new rate plan presented to the council would result in a 5% increase starting Sept. 1, with 4% increases each successive year until 2018.
GWP General Manager Steve Zurn said that the proposed rate increases would help the city “chip into the negative balance” caused by the miscalculated rates and “fund capital projects.”
The altered rate structure would revise the cost structure to use monthly data and convert the monthly fixed rate to a daily rate. Recycled water discounts would be reduced from 25% to 15%.
Zurn presented the council with charts indicating that even with the increases, GWP would still be comparable to many Southern Californian water agencies in terms of rates, and would charge less than Los Angeles and the Crescenta Valley Water District.
“We just want to fix the structure that is there now and move forward,” said Zurn.
The new rate plan was presented to and approved by the GWP Commission on June 30. Zurn also said that four community meetings were held throughout June regarding the rates. Though the public has usually been resistant to rate increases, Zurn said that most of the public’s questions were in regards to infrastructure, the Willdan lawsuit and drought rates.
City Council members were divided on whether or not to go forward with the rate increases.
“As much as I understand the staff wanting to get us back on full financial footing, I’m not going to support the recommended rate increase. Instead, I would support the compromise of the 4% per year increase,” said Councilmember Laura Friedman. She said that she trusted Zurn and the staff to help resolve the city’s financial situation, even at the reduced rates.
Weaver said he agreed with the water increase, but felt it was only a temporary solution for systems and infrastructure that needed to be upgraded.
“We have to upgrade those systems,” said Weaver. “I’ll approve [the rates] but I don’t like it. We’re not building up the reserves the way we’re going to need. We’re postponing this for a council that’s going to be sitting here four or five years from now and be faced with the same thing again.”
Newly installed councilmember Paula Devine suggested that alternate plans and solutions for conservation be explored.
Devine agreed that the plan corrected the mistakes of the previous plan, but also “imposes a drought surcharge. I don’t feel it’s fair to raise water rates. Our residents are conserving water and they’ve been successful. To add this to their water rates goes against my beliefs. I realize that we’re in a tough situation but I think that I cannot with a clear conscience vote in favor of a water rate increase.”
Mayor Zareh Sinanyan said that he understood that infrastructure costs have gone up, but said that the rate increases were unfair to residents.
“We have a situation where it’s unfair to subject residents to shock therapy by imposing a COSA (Cost of Service Analysis) that’s too high, too much at once,” said the mayor. “At the same time, it’s unfair to the utility not to be able to fund its own programs.”
Sinanyan agreed with the 4% per year increase, albeit with “a significant level of discomfort.”
The council agreed to further deliberate and vote on the rates at next week’s meeting on