CITY HALL — There was about as much excitement as you’d expect around the prospect of substantially raising water rates at City Council’s meeting Tuesday night.
Council voted 5 to 1, while expressing ambivalence, to keep a five-year, 77.7 percent rate hike on the table.
City officials will come back for final approval in February and council will have the option to lower (but not raise) the proposed rates then.
The 77.7 percent increase would come through a 9 percent increase in the first year and 13 percent increases over each of the following four years.
Without any changes to the status quo, water rates would increase 13 percent over the next five years — 2.5 percent inflation increases each year — and the Water Fund would go into the red by fiscal year 2016-17, city officials said.
A compromise option would be to raise rates by 9 percent each year for the next five years — a 53.9 percent total increase — instead of jumping 13 percent in each of the second through fifth years.
City officials have plans for $33 million worth of capital improvement projects over five years but under the compromise rate structure about $5 million of that would be eliminated.
One concern voiced by some residents at the meeting is that, while these infrastructure improvements will benefit future residents for decades, they will be paid for by the current ones.
“That is unfortunately one of the things that comes with water,” said Councilmember Gleam Davis, “and the perfect example of that are the rate increases that people in Nevada paid to build Hoover Dam. Even though the people who paid for Hoover Dam are probably now long gone we’re all continuing to benefit from the water infrastructure that that created.”
The Hoover Dam, it should be noted, was financed through a loan from the U.S. Treasury that was paid off in 1987, according to the Los Angeles Times archives, but the West continues to benefit from the project as the dam is showing no sign of slowed production.
Some suggested a bond that would allow the improvements to be paid for over a longer period of but city finance officials recommended against it, noting it would be frowned upon by the rating agencies.
Santa Monica buys about 20 percent of its water from the Metropolitan Water District (MWD) which is increasing its rates steadily over the next decade. City Hall has a goal of becoming water self-sufficient by the year 2020 – a goal that city officials say will require investment in water infrastructure.
Councilmember Terry O’Day had to leave the meeting early to catch a plane but said, before exiting, that he’d be comfortable with at least the compromise 9 percent rate increases.
Davis made the motion, which was accepted by four of her colleagues, to have city officials move forward with the 13 percent increases, noting that council would be allowed lower those rates prior to final approval. She further noted that, under Proposition 218, they would not be allowed to raise them without repeating the public process that will take place between now and the February meeting.
“It seems to me that it’s important to give ourselves the greatest degree of flexibility, which would be to propose to the community, under the Prop 218 structure, the 13 percent increase,” she said, “and then, if between now and February when we have to consider it and take the final vote, if we need to reduce it we can.”
Mayor Pro Tempore Tony Vazquez agreed, noting that he’s leaning toward the 9 percent increases over the 13 percent increases.
“I’m not a real big fan of the motion,” he said, “but I think I will support it because it sounds like, at least going forward, in terms of the process, it gives us the opportunity if we have to.”
Councilmember Sue Himmelrich was the lone voice opposing the measure.
Mayor Kevin McKeown went historical in his support of the motion.
“It’s almost 100 years ago that our community of Santa Monica faced a vote on whether to become part of Los Angeles,” he said. “The big draw was that L.A. newly had water thanks to William Mulholland. And because we had water, and did then, and do now, we were able to say, ‘no’ when most of the other communities in the basin became part of the city of L.A. We are Santa Monica in large part because we have our own water.”
McKeown was arguably the most enthusiastic member of council in his support of paying for water.
“What we’re facing here is a real sobering look at what it costs to truly be free, to be independent,” he said. “But maybe we have to do it.”