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Glendale water rates found to be severely flawed

City officials have decided to eliminate the current rate system.

December 18, 2013|By Brittany Levine, brittany.levine@latimes.com

After discovering that water rate increases approved by the City Council in 2012 are riddled with errors, city officials this week decided to scrap the current rate system and start over.

The flawed rates, which were supposed to span four years, caused Glendale to overcharge some commercial customers and undercharge some residential customers, resulting in Glendale Water & Power to lose out on at least $8 million in expected revenue, even though the utility sold more water. This does not count any refunds or credits for overcharges, and city officials don’t yet know the total impact.

“There is a host of problems that exist in [the rate] models,” City Manager Scott Ochoa said during a City Council meeting Tuesday night. “We do sincerely apologize.”

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The about-face comes after several business customers and city critics complained that the water rates proposed by a consultant in 2011 seemed off the mark and burdensome.

Yet, in March 2012, the council approved the rates on a split 3-2 vote, with former Councilmen Rafi Manoukian and Councilman Frank Quintero dissenting. The four years of rate increases were supposed to increase Glendale Water & Power revenue by less than 1% the first year, 2% the next and then 4% and 5% in the next two years, charging customers differently depending on how much water they use and the size of their meters.

Commercial customers also had to pay significantly higher rates for fire lines on their properties. Some commercial customers’ fire line rates could, over time, more than quadruple, according to city records.

Ochoa said the water rate problems are due to a consultant’s miscalculations. The city paid Willdan Financial Services of Temecula $107,000 to prepare the new water rates and City Atty. Mike Garcia said he is looking into legal remedies to recoup Glendale Water & Power’s loss.

“We believe they are responsible legally for all the short revenue,” Garcia said.

When Harry Zavos, a long-time Glendale Water & Power critic and former law professor that effectively halted a multi-million dollar transfer from the water-side of the utility to the city’s General Fund, attempted to speak on the water rate debacle at the council meeting on Tuesday, he was blocked by Mayor Dave Weaver, who said he turned in his card requesting to speak too late.

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