Pull-Back on Water Rate Increases


A water rate increase plan that would have augmented Glendale Water & Power’s (GWP) revenue by as much as 26.3% over the next five years was snuffed out by Glendale City Council on Tuesday night. Instead, they set the cap at 20.4% over four years.

The decision comes after the uncovering late last year of flaws in the rates devised by Willdan Financial Services of Temecula for new water rate increases.

The structure originally proposed by Willdan would have increased the monthly bill of an average single-family customer currently paying $72.12 by approximately 11% next fiscal year to $79.83. Annual increases of approximately 5%, 4%, 5% and 5% over the following four years would be effected. By fiscal year 2018–19, that same customer would be paying $95.34.

Glendale adopted Willdan’s tiered rate structure in April 2012. By 2013, city staff noticed that the revenue meant to be boosted by the rate increases was not coming in the way they had anticipated. Most of the increased revenue came from fire line overcharges, while single, multi-family, and commercial customers were being undercharged.

Willdan’s error caused the GWP to lose approximately $8.8 million in revenue from single and multi-family customers alone.

Mayor Zareh Sinanyan remarked that their mistake is aggravated by their failure to “own up” to it. Councilmember Ara J. Najarian referred to it in more scathing terms, calling Willdan’s mistake “bone-headed” and “unmitigated negligence, bordering on recklessness.”

A new rate plan was commissioned from Bartle Wells of Berkeley. The city is currently pursuing litigation against Willdan.

The city’s proposed 20.4% cap is not final and can be adjusted downward when the council votes on new water rates in July. They cannot, however, go over that percentage.

Complicating matters is that the city now finds itself attempting to plug the holes in revenue that the original rate structure plan was meant to address, but also mitigate the revenue loss incurred by that plan.

Additionally, the possibility of imposition of adjustable drought charges on utility customers is a factor that may be in play in the future.

Before council votes on the new rate structure, city staff will be conducting public outreach on the issue across the city.

Affected residents in the Crescenta Valley area will be first in line to voice their opinions and thoughts on the plan to the city.

City staff will be conducting a community meeting at the Sparr Heights Community Center on Wednesday, June 4 from 6 p.m. to 7:30 p.m.