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Santa Monica City Council Approves 5 Percent Hike in Water Rates for This Year

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

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Harding, Larmore
Kutcher & Kozal, LLP

Convention and Visitors Bureau Santa Monica

By Niki Cervantes
Staff Writer

February 26, 2016 -- The Santa Monica City Council Tuesday approved a 5 percent hike in City water rates after its officials said unanticipated savings – despite the severe drought -- meant customers could avert the even bigger increase of 9 percent originally given the nod last year.

“We have managed to manage our water well,” Council Member Kevin McKeown told his colleagues as they discussed the City’s Water Fund at Tuesday’s regular meeting at City Hall.

The Council voted 6-0 for the rate increase. Council Member Terry O’Day was absent.

Customers will see the lower rate increase on their March bills, which reflect the first months of 2016, City officials said.

Reviewed annually, the rate could return to nine-percent next year, officials said, particularly if the four-year drought drags on.

“We continue to hope and pray for some significant rain,” Water Resources Manager Gilbert Borboa said at the meeting. “Do the rain dance.”

What the Council vote means is that a single family at the water system’s First Tier pays $2.87 per 100 cubic feet of water this year, compared to current rate of $2.73 per 100 cubic feet of water.

With a nine-percent rise, the rate would have jumped to $2.98, said Martin Pastucha, Public Works Director.

A family at the Fourth Tier now plays $9.59. At a five-percent hike, the rate will be $10.07; at nine-percent, the rate would have inched up to $10.45, he said.

California’s punishing drought – believed to be the worst in modern history here -- has resulted in water agencies statewide pushing up rates even as customers have been forced to use less water or face penalties.

Santa Monica began inching toward double-digit hikes for water last year after officials forecast that the Water Fund, which was $46 million in fiscal 2014-2015, was going to sink into the red soon because of higher costs for water, big infrastructure projects and revenue for staff.

There was little comment Tuesday about rise in rates -- a change from the crowd that turned up to complain last February as the City Council was adopting its five-year plan of 9 percent hikes in the water rate annually.

Also on the table at that time were 13 percent annual increases.

More than 20 people showed up that night, and about 4,600 wrote to the Council to protest the higher rates, as well as the Council’s aggressive plan to have a self-sufficient water supply by 2020.

“We made, I though, a courageous decision,” McKeown said in recalling that night a year ago.

Only a handful of people turned out this Tuesday. The most prominent was a member from a water advisory committee working with the City who suggested that the rates be analyzed every six months, instead of annually.

That idea will be considered, officials said.

Santa Monica’s Water Fund is comprised entirely of revenue from water use and sewers, Borboa said. About 30 percent of the water used in the City is imported from the Metropolitan Water District. The City paid about $5.5 million for that water last fiscal year – a price that has risen about five percent annually in recent years, he said.

The rest of Santa Monica’s water comes from groundwater

About $16 million of its Water Fund goes for employee wages and benefits, the single-biggest expense for the fund.

Wages, Borboa said, have increased at the cost of inflation recently. He said he didn’t know how much costs have increased specifically for benefits. Historically in California, both wages and benefits for public employees often outpace inflation.

According to City water authorities, the savings that funded the new lower water rate hike came primarily from customer conservation – water use dropped a whopping 22 percent as of June – and less money needed for capital improvements.

Pastucha says that some big projects finished early and others were delayed, racking up significant savings. Such projects will still cause the Water Fund to shrink to about half its current size in coming years, but he said the City will be able to retain a healthy emergency reserve nonetheless.

In his Council appearance, Borboa also noted that as part of the City’s expansive water-preservation campaign it is also using grant money to conserve runoff and to recycle water back into the aquifer.“We do what we can,” said Council Member Ted Winterer.

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