Water is fast becoming an expensive commodity. Santa Monica residents are in for a sharp increase in their utility bills with a rapid rise in water rates scheduled to combat associated rising costs in water provision.
City Council voted 5-1 late Tuesday evening to adopt City staff’s recommendation of a 13 percent year-on-year rate hike come February 2015. Councilwoman Sue Himmelrich opposed the motion while Councilman Terry O’Day had left chambers prior to the vote.
The rate increase adopted will begin with a nine percent hike in 2015, equitable with the month two implementation date, and will continue with a 13 percent increase each year until 2019.
The increased revenue will be used to provide a self-sufficient Water Fund to combat drought measures and the increasing costs associated with water.
“Due to declining water sales and increased capital funding needs, the City’s cost to provide water service is projected to exceed the City’s water revenues without additional water rate increases,” according to City staff.
Depending on water use, some residents could see bills jump by up to 70 percent over the five-year time span, according to calculations based on forward projections.
“Even with the proposed 13 percent [per year] increase, residential water bills in Santa Monica will be lower than the current average rate of the other communities surveyed,” City staff stated.
While not a “big fan” of the motion, Mayor Pro Tem Tony Vazquez said that he supported the move because of the process.
“It gives us the opportunity to roll back if we have to, and if we go lower I understand that we can’t go up,” Vazquez said. “I’m hoping between now and February the 24th we could brainstorm it a little bit more and hopefully get some more information to come back to us.”
Citing a recent news article that Los Angeles relies too heavily on water carried via aqueducts that could be severed in case of an Earthquake or natural disaster, Mayor Kevin McKeown said that should such a disaster occur, it would take over a year to fix leaving only a six-month supply of water in place, creating a complete economic meltdown. He said that Santa Monica should structure itself to standalone.
“What we’re facing here is a real sobering look at what it costs to truly be free, to be independent,” McKeown said. “Maybe we have to do it. We have local water that we own, that we can pull out of the ground, and if we want to suck it up, we’ve got to suck it up and pay for it.”
After the motion passed, Councilwoman Gleam Davis moved to give direction to City staff to examine making allowances for people of low income, explore caps rather than credits, and investigate the possibility of allowing providers of 100 percent affordable housing projects to use such credits.
Councilman Ted Winterer added that the direction should include examination of the task force recommendation that when the water supply shortage declaration is lifted then the rate structure is revisited to see if there are more effective means to encourage conservation rather than the rate structure.
The directions motion was moved by Councilwoman Davis and seconded by Councilman Winterer. They passed unanimously.
According to City staff, Santa Monica’s current water rate structure is common in California.
“It provides a built in mechanism to support water conservation on a pay for what you use basis,” according to City staff. “It is simple to understand, generally fosters public acceptance, and provides relatively predictable revenues.”
Revenue raised by the increases will contribute to the $33 million needed over five years to fund the City’s water system Capital Improvement Program.