City Council Approves Water Rate Increases

Votes 4-1 with Putnam Dissenting

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Residents might be a little uneasy opening their water bills in the future as South Pasadena City Council members have approved an 11 percent increase in 2014, 4 percent in 2015 and another 4 percent hike in 2016.

When compounding the water rates, it marks more than a 20 percent increase for city home owners during those years.

Prior to the council’s action this week, the city had increased water rates by about 150 percent over the previous five years to make long-neglected repairs and replace the city’s aging infrastructure.

Doing the math, water rates are rising more than 170 percent over an eight-year period.

Rate increases were voted in 4-1 with City Councilman Philip Putnam casting the lone dissenting vote.

The city’s water lines and some reservoirs are in disrepair and have not been renovated replaced in 80 to 100 years.

“The city has neglected the water system,” said Putnam, noting that the city undercharged for water over the past 50 years. “The did not charge a sufficient rate to replace the capitol improvements that now need to be replaced. So, unfortunately, what is happening to the people living in South Pasadena today are paying more than they should for water because people who live in the city in previous years are paying less than what they should have paid for water.”

Putnam, in explaining why he voted against the rate increase, has a history of voting against them over the years.

“In essence, I feel like the rate increases are too much too fast,” he said. “There are other things we could be doing. First of all, we should be charging fairer rates for water.”

Capitol improvements, the cost of the reservoirs, pipes and pumps is about 70 to 75 percent of the cost of water, noted Putnam. He said the cost of the water is roughly 25 percent of the water cost.

“We say we charge for water,” he said. “That’s how we measure what people pay is by how much water they use. That’s not a fair way to charge for water because the main cost of the water is just bringing the water to the water meter. If they choose not to use any water they still need to pay 70 percent of the capitol improvements because we’re delivering water to their house and that’s what it costs. But that what we’re not charging.”

The city has water bonds due to a lack of funding to pay the millions of dollars it will take to repair its infrastructure.

“The city issues $40 million in water bonds,” Putnam explained. “I thought we should phase that in instead of issuing them in all at one time. I was told that because interest rates were so low it was the best time to issue the bonds. The city issued the bonds despite my questioning it and, although we did get a little lower interest rate than what we might have gotten had we waited to issue part of the bond, because we didn’t spend the money, we have spent millions of dollars in interest on the bonds where the money has just been sitting in the city’s treasury getting one tenth of one percent. We’re spending three to four percent on that money. We’re spending million of dollars in interest just to have the money sitting in the city treasury to spend on the future. So, we’ve wasted millions of dollars in interest expense that we could have used on water improvements had we done this better.”

Putnam stressed that water rates are going up much too quickly, noting that for some seniors who are home or condominium owners its their largest bill they pay each month.

“We have some people who have owned homes in this city where their water bill is almost equal to their house payment. We have charged way too much, too fast.”

The councilman said he’s met with about 20 to 30 individuals in town within the past two whom he claims are “very upset” about the rate increases in recent years.

“People recognize the need for replacing our infrastructure,” said Putnam. “People are supportive of it, but they are not supportive of a 200 percent increase in water rates over a very short period of time.”

Fellow councilman Michael Cacciotti says rates must go up because of the cost of rebuilding the city’s entire water system due to “deferred maintenance over the past four decades,” he explained, adding that the city is currently paying higher rates for water from the Upper San Gabriel Water District, which receives it from the Metropolitan Water District. “The cost water per acre foot just a few years ago was a few hundred dollars. It’s now up to $600 to $700 dollars per acre. In addition, for many years the city borrowed money from the water system.”

The increased rates, explained Cacciotti, will not only go toward purchasing the water the city buys, but the cost of reconstruction of Wilson Reservoir in San Gabriel and building a new reservoir to replace the Garfield Reservoir in the city.

“Garfield is our biggest reservoir, which needs to be demolished and reconstructed in the next couple of years,” said Cacciotti, noting that once Wilson Reservoir is completed the city will apply about $15 million to the Garfield project.

Following that effort, more funds, according to Cacciotti, will go to reconstructing Graves Reservoir that pumps water into South Pasadena from its location in San Marino.

“That’s another reservoir that is way past it’s design life,” said the councilman. “Water stations, pump stations, water treatment plants all need to be replaced.”

In the 1950s, ‘60s and ‘70s, the councilman said the federal government would give cities, municipalities and local agencies funds for large infrastructure programs to rebuild reservoirs and streets.

“That has all stopped,” he insisted. “Because our U.S. government is spending billions of dollars to rebuild Iraq and Afghanistan’s water system, they’re no longer supporting local jurisdictions like South Pasadena. We’ve lost millions of dollars in federal support.”

Cacciotti stressed that he doesn’t want to see water rates increase, noting: “I’m tired of paying the higher costs myself, but we have no other choice. If one of our reservoirs breaks down, we’re going to pay twice what we’re paying now.”

City officials say water rates have been adjusted on a number of occasion in the past to pay off the $43.4 million 2009 water revenue bonds and previous outstanding debt.

The last water rate increase was effective January of this year. The next proposed rate increase is January.

  • : Votes 4-1 with Putnam Dissenting
  • : By Bill Glazier Review Editor
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