CITY HALL — City Council will consider a significant water rate hike for the second time in two months on Tuesday.
Council rejected the hikes in October, asking city officials to come back with more concrete information about why the rates should rise so drastically.
City officials came back with the same proposed rate increases but included a water study and more information about the repairs that need to be made to the city's old water infrastructure system.
City water officials are recommending a 9 percent increase in the first year and 13 percent increases over each of the following four years for a five-year hike of 77.7 percent.
Without any changes to the status quo, water rates would increase 13 percent over the next five years — 2.5 percent inflation increase each year — and the Water Fund would go into the red by fiscal year 2016-17, city officials said.
A compromised 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 compromised rate structure about $5 million of that would be eliminated.
About $20 million worth of the proposed $33 million would go toward "infrastructure improvements associated with replacing aging existing infrastructure facilities comprised of water mainlines and appurtenant distribution system facilities that are approaching the end of their useful lives," city officials said.
Some of Santa Monica's water pipes date back to the 1920s.
About $5 million would go toward smarter water meters, which would provide more frequent and accurate metering of water use.
The 77.7 percent increases, which city officials are recommending, would keep the Water Fund from running a deficit and allow for all the projects to go through.
Additional loss of revenue is expected in part because of City Hall's goal of a 20 percent water reduction.
"Since most of the water utility's costs are fixed, the Water Fund is projected to be affected by the addition of costs associated with a new water conservation unit, conservation programs and incentives, and a reduction in water sales-based revenues," city officials said in their report.
The current rates were established in 2008 and Santa Monica water users have some of the lowest water bills in the region, city officials said.
Culver City residents pay close to $180 for 30 hundred cubic feet (HCF) of water compared to Santa Monicans, who pays just over $90. One HCF equals 748 gallons.
Of the municipalities listed by city officials, only Pasadena pays less and only slightly so.
dave@www.smdp.com
