By Ted AYALA
The wallets of local residents, already hurting from the persistent economic recession, may be feeling an extra sting in the near future. With shrinking revenues – and shrinking options to make up for the shortfall – Council and GWP discussed a proposed rate hike for GWP customers on Tuesday. The rate hike, if approved, would begin as early as the first quarter 2012.
GWP’s proposal would see rate increases beginning at 1% for customers who use the least amount of water to as much as 13% for heavy users. With that in mind, rate increases will be implemented in a three-tier structure based on the volume of residents’ usage. Commercial customers will not be included in the tier rate hikes. Instead they will see a general rate increase.
Officials from the GWP cited the need for the rate increases to complete improvements to infrastructure and increases in costs for the agency.
“We want to minimize shocks in the system,” said Habib Isaac of Willdan Financial Services, which has helped the GWP to devise the rate hikes. “This is why we are doing a planning horizon across five to 10 years.”
Isaac also cited current conservation policies in the city as a means to change their water consumption behavior, thereby mitigating the costs of the increases to the average customer.
“This would make it a lot easier to implement [the rate hikes], and make for a smoother transition,” he said.
Peter Kavounas, assistant general manager of Water Operations for the GWP, stressed the dire need the agency has for the rate hikes. Citing reductions in the budget that led to reductions in water quality and maintenance, Kavounas stressed that the increases will bring both back to 2009 levels.
Kavounas stated that the GWP is facing an $11.5 million for the fiscal year of 2011-12. Implementation of smart meters and local water conservation during the past drought throttled GWP revenue.
“Where is the consistency in the concern for rate payers?” thundered Councilman Ara Najarian. “I want the artificial turf back and it can totally mitigate [the rate hikes]. Let’s include that in the entire discussion here.”
Council will return in the next few months to further discuss the rate hikes.