City Council to Vote on Water Rate Increase Wednesday Night

The City Council will vote Wednesday night on an impending water rate increase, necessary to meet a $500,000 shortfall in funds. The council will decide whether or not to approve a recommended tiered rate model, which would assess higher charges to residents who consume greater amounts of water.

Both options would increase water rates by 30 percent in March 2011. The rate would continue to increase in subsequent years, by another 30 percent in 2012, 18 percent in 2013 and 2014, and five percent in 2015.

Last week, the city's Water Council unanimously backed the tiered rate increase, in an effort to not only generate necessary revenue but also to effectively promote conservation among South Pasadena residents.

The city issued a $43.4 million water bond last year to finance a portion of water capital improvement projects, and approved a water rate hike at that time to raise rates by 14 percent in July 2011. However, according to the city's finance director Chu Thai, that amount is still not enough to cover costs. 

"By the end of June 2011, the water fund needs $500,000 to maintain a sustainable budget," Thai said. Currently, the city's water-related expenditures exceed revenues collected from water bills.

Thai said both a flat rate increase and a tiered rate system would generate the same amount of money for the city. However, he along with Water Council members believe the tiered system would be more effective at cutting down water usage. 

"The tiered increase would cost enough for the wasteful use of water, that people would respond to that and change," said Bill Kelly, vice-chair of the city's Water Council. He pointed to the watering of lawns with English vegetation as one example of wasteful water use.

According to Kelly, a tiered rate system is the more fair option. "If you have a flat rate increase, everyone is paying the same. Even a person in an apartment who uses very little water is in essence subsidizing the watering of great big lawns."

"The purpose of this is to get people to cut back, and give them an incentive to do so," he added.

The tiered water rate system would also include commercial establishments. "What we backed is a more complex tiered rate system that includes everyone," Kelly said.

Operating expenses for the San Gabriel Basin Watermaster have also increased by 24 percent, from $4.4 million in 2009-2010 to $5.4 million in 2010-2011, according to Thai. The city paid almost $1 million in overdraft fees last year, and the rate increased from $450 per acre foot in 2009 to $696 per acre foot in 2011. 

The rising costs of water coupled with over-consumption of water prompted the Water Council to recommend the tiered water rate structure, said Diana Mahmud, the council's chair.

Water that's used beyond the allocated amount is usually more expensive, she said. "At this point, water has become a commodity," she said, alluding to preceding years of drought which reduced water storage levels.

Since the city is consuming 2,000 acre-feet more water than its allocation of 3,000 acre-feet per year, Mahmud believes that tiered water rates would help cover the cost of this extra water usage. 

"As you use more water, the cost of your water goes up," she said, adding that electricity is billed this way. "When consumption creeps into higher tiers, the unit rate goes up."

She also said that a California law enacted last year requires the city to reduce water consumption by 10 percent in five years and by 20 percent by the year 2020. 

"There's a pressing need to increase the water rates," said Assistant City Manager Sergio Gonzalez. "If we don't, we would be in technical default of the bonds we've floated."

He said the city plans to set a public hearing on Feb. 16, 2011 to solicit comments on the matter.

For previous coverage on the water rate increase, visit .

To view a report on the water rate increase, click on the first pdf document in the photo box above.

The Dec. 15 City Council meeting includes several other important agenda items:

Adopt 710 Freeway Resolution

The City Council is slated to adopt a resolution which affirms the city's official position against any surface or subsurface extension to the 710 Freeway through South Pasadena. The council approved Resolution 7134 on Nov. 3, but later added clarifications to define the meaning of "multi-mode" transportation.

This new resolution supports multi-modal solutions including light-rail, heavy-rail, bus and bicycle alternatives throughout the San Gabriel Valley and recommends that the Metropolitan Transit Authority study the cost benefits of these multi-mode alternatives in comparison to the proposed tunnel.

The new resolution would take the place of Resolution 7134 and 6960, which passed in Nov. 2007. For previous coverage, visit .

Click on the second pdf document in the photo box above to view a copy of the draft 710 resolution. 

Industry/Business Resource Center

A discussion of a possible Industry/Business Resource Center, which could assist new businesses relocate to South Pasadena. A city-funded retail/land use study completed in June 2010 suggested the creation such a center to attract more businesses to the area. 

This center, which would be housed at City Hall, would be staffed by a city employee, who would match business owners with vacant properties and guide businesses through the permitting process. According to Gonzalez, the center would cost the city $6,000 per month to operate. 

The council would have to decide how to fund such a resource. Gonzalez said the city could use a $300,000 earmark allocated by Congressman Adam Schiff for downtown revitalization, which the city initially planned to use for the restoration of the Rialto Theater. If the earmark goes towards the Rialto Theatre, the owner of the Rialto property would be required to pay back the grant upon selling the building. However, the property owner has not agreed to that provision, prompting the city to consider funneling this earmark towards the business center.

Another option would be to use funds from the Business Improvement Tax, which generates $140,000 per year and almost exclusively goes to the South Pasadena Chamber of Commerce.

Click on the third pdf document in the photo box above to view a copy of the Dec. 15 meeting packet. The staff report concerning this agenda item is on pages 555-557. 

Final design of 110 Freeway Interchange Project

The council plans to discuss whether to put $500,000 to $1 million in funds towards the final design of the 110 Freeway interchange. The city stands to lose a $9.3 million earmark from Rogan funds if it does not begin construction on this project soon.

The interchange project, estimated to cost $16 to 18 million, would improve the hook ramp on the southbound 110 Freeway at Fair Oaks Avenue as well as the northbound 110 Freeway off-ramp at Fair Oaks Avenue. 

Though this project was originally identified as the last of four capital improvement projects to receive funding from Rogan funds, it has not progressed due to a $7.5 million shortfall in funds. The city is waiting to hear back from the U.S. Department of Transportation regarding a pending grant application.

Gonzalez said the city could begin this project as early as next winter, as soon as the current is complete. 

Click on the third pdf document in the photo box above to view a copy of the Dec. 15 meeting packet. The staff report concerning this agenda item is on pages 543-545. 

Alternate uses of the Public Works Yard

A fire in April 2009 destroyed a significant portion of the city's Public Works Yard at 825 Mission Street, but the city has yet to decide whether to rebuild the property or relocate the Yard to another location such as the Arroyo. The council will discuss whether to accept an insurance fire claim of $650,000 for the rebuilding of the damaged facility or choose not to rebuild and receive $250,000 in cash.

Last winter, South Pasadena residents suggested other uses for the land at 825 Mission Street, including the expansion of the recreation center or a new community room, Gonzalez said, although funding sources for any of those options remains a question.

The City Yard houses Public Works vehicles, maintenance equipment, an underground fuel tank and offices for 20 city employees. It is also home to a rare that belongs to the Library and survived the fire unharmed.

Click on the third pdf document in the photo box above to view a copy of the Dec. 15 meeting packet. The staff report concerning this agenda item is on pages 613-615.