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As Glendale mulls rate changes, water utility deficit grows

March 19, 2012|By Brittany Levine, brittany.levine@latimes.com

The projected water-utility deficit at Glendale Water & Power that prompted a series of proposed rate increases has ballooned to roughly $21 million in less than a year, officials said Monday.

Four years worth of rate increases have been proposed to help bridge a $13.5-million deficit, but months of delays in adopting the new rates means they may just bring less than a 1% revenue increase to the utility in the first year, according to a city report.

The deficit continued to expand as Glendale Water & Power carried on with capital improvement projects that were already underway, such as improving the way some water is disinfected to get in line with new state rules and a pipeline that serves downtown and South Glendale.

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At a meeting of the Audit Committee Monday, city Finance Director Bob Elliot said funding other infrastructure projects “will be quite difficult if we don’t get that rate increase.”

On Tuesday night, the City Council is set to vote on a controversial water-rate redesign that would significantly change how residents and commercial properties are charged for their water.

The plan is to split residential customers into multiple tiers, charging those who use large amounts of water a higher rate. Commercial customers won’t be tiered, but those with meters that provide water during fire emergencies to their buildings — many of Glendale’s biggest 100 businesses — will be charged drastically more for those meters, a change Glendale officials said should have been put in place years ago.

The new rates are aimed at charging each customer class depending on the cost the utility incurs to serve them, said Peter Kavounas, assistant general manager for water services.

Each customer’s bill would be affected differently, since rates would differ depending on the type of user and how much water they consume. The rate increases would occur incrementally over the next four fiscal years.

The average residential customer who pays $63.78 per month could see their bill increase by a few cents this year, but jump by $12, or 19%, by 2015 compared to current charges.

An average 20-unit apartment building with an $886.54-bill may see a $79 decrease at first, but a $14, or 1.6%, boost by 2015. A typical high-rise office building with an average-sized fire meter may see a $110 — or 2.5% — drop in 2012 from $4,413.05 it currently pays, but by 2015, a $588, or 13%, increase.

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