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Redirected funds would cover water-rate hike

December 05, 2011

At its Nov. 29 special meeting the City Council approved a process meant to lead to a vote on a 13% water-rate increase over four years and an anticipated 5% in the fifth year period. The increase is not needed for the day-to-day operation of the water utility — City Manager Jim Starbird stated it shows a profit. Rather, it's required to pay for needed capital improvements. As reported Nov. 30 by the Glendale News-Press: “…additional revenue is needed to replace a $13.5-million deficit for the water utility where accelerated capital expenditures have outpaced revenue in recent years.” At that meeting, Councilman Rafi Manoukian proposed an alternate source of funding — one which would minimize the rate hike's size, if not do away with it altogether.

Since 2006, while capital needs have outpaced GWP’s water revenue, the city, relying on its charter, has been transferring $4 million a year of water revenues to the general fund in violation of Article XIIID of the California Constitution — a practice discontinued this year. Manoukian's position is that the $20.5 million of illegal transfers be returned to the utility over a period of time, beginning with last year's $7-million surplus. That money can pay for improvements without the need for a rate hike. That's not only sensible, but fair, just and equitable. Only one member of the council bothered to acknowledge the proposal by indicating that maybe the misappropriated sum of $20.5 million should remain with the general fund so that the $7-million surplus could be used for general fund purposes rather than for the utility's improvements.

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When the proposed rate increase reaches the council in January, each member will face a choice: “Shall I vote for the rate hike to pay for the improvements, causing ratepayers to pay for them twice (once when they paid fees which should have been set aside for the improvements instead of being wrongfully transferred to the general fund, and a second time out of rate hikes)?” or “Should I insist that they be paid for by the return of the misappropriated $20.5 million?” Every ratepayer who's a Glendale voter needs to file away the choice made by every member of the council and remember it, if and when incumbents run for re-election.

Harry Zavos

Glendale

 
 

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