The City Council is split on how much to raise water rates over the next five years to fund projects that will wean Santa Monica off of imported water.
The council discussed Tuesday how much to charge residents and businesses for water as the city moves toward a goal of water self-sufficiency by 2023. The rate increases will finance almost $42 million in projects that will allow Santa Monica to stop importing water from the regional water utility, which local officials say will save ratepayers money in the long run.
Exactly how much more residents will pay for water and wastewater collection depends on which of two possible rate structures the council adopts in January. One minimizes rate increases by delaying the replacement of water and wastewater mains until the city achieves water self-sufficiency, while the other fully funds all projects and maintenance.
One rate structure raises water rates 10% each year over five years and increases wastewater rates by 9% for three years with a 3% increase in years four and five.
The other raises water rates by 20% in the first year, 18% in the second and 14% for the remaining three. Wastewater rates would increase by 10% for four years and 3% for the final year.
Bi-monthly water and wastewater bills for single-family homes would increase by $23 on average under the lower rate structure and $36 under the higher rate structure. Multi-family buildings would pay $18 t0 $48 more for water, or about $1 to $3 per tenant. Bills for commercial buildings would rise between $50 and $87.
Water rates have risen about 7% per year on average since 2009 and wastewater rates have risen about 5%. The average Santa Monica household still pays about $50 less for water than it would in Los Angeles, Culver City or Beverly Hills.
Councilmember Ted Winterer said Tuesday he believes the city should opt for the lower rate structure to avoid burdening residents and businesses.
“I just think it’s asking a lot of our residents and our businesses to go for that steep an increase as proposed in a fully funded scenario,” Winterer said.
Councilmember Sue Himmelrich said she thinks the city should only raise rates to the level necessary to fund water self-sufficiency projects.
“If doing the higher rates isn’t going get us to self-sufficiency faster, I would prefer focusing on the lower rates,” Himmelrich said.
Councilmember Kevin McKeown said he thinks deferring maintenance on the city’s vital water infrastructure could create unforeseen costs.
“I feel we should go for the higher rates and take care of that maintenance because I believe in the long run it will cost us more if we don’t,” McKeown said.
Officials say the Metropolitan Water District of Southern California, which currently supplies about a third of Santa Monica’s water, will raise rates during the 2020s to fund infrastructure projects and may even have to ration water while its main water supply, the Colorado River, sinks deeper into its longest-ever drought.
Santa Monicans will also have to pay more for water, but the increases will be slight compared to what other Southern California residents will pay because the city will be producing 99% of its water, said Sunny Wang, a principal engineer with the city’s water resources division.
“By 2026, our unit production costs will be lower than MWD,” Wang said. “That doesn’t mean we won’t raise rates, but we’ll raise them by a much smaller margin.”
City staff will publish a rate study report Oct. 22 and the council will hold a public hearing on the rates in January.