Politics & Government

Why Your Water Bill Must Go Up

If approved, residents can expect a 14 percent increase in sewer rates and a 18 percent increase in water rates April 2012.

City staff presented a new set of projected sewer and water rates at Wednesday's City Council meeting:

Month/Year Sewer % Spike Monthly Sewer Bill Average* Water % Spike Monthly Water Bill Average* Jan. 2012  --  $9.11 -- $60.01 April 2012 14% $10.39 18% $70.81 Jan. 2013 14% $11.84 11% $78.59 Jan. 2014 9% $12.90 11% $87.24 Jan. 2015 9% $14.07 3% $89.86 Jan. 2016 6% $14.91 3% $92.55

*These monthly prices are based on 37 units of water used every two months.

While the proposed water rate increases will generate $10.5 million in water revenue for FY 2015/16, the proposed sewer rate increases will generate $1.5 million.

Find out what's happening in South Pasadenawith free, real-time updates from Patch.

Paying Off Debt

In 2009, the City floated $43,405,000 in Water Revenue Bonds to fund various water capital projects with hopes of starting construction in 2010.

Find out what's happening in South Pasadenawith free, real-time updates from Patch.

Yet even though the projects have been delayed, the debt coverage is due—and the current water fund is not meeting the 120 percent required.

"One of the reasons we are not meeting our debt coverage is because we floated all the debt at once," Councilmember Philip Putnam said at Wednesday's council meeting. "The analysis that was presented to us anticipated that we would be spending that money—which is why we voted to do this—and making these improvements relatively quickly."

"But we found out we can't do that. We don't have the public works staff to supervise, the design capability," he continued. 

Putnam went on to stress that the City is losing over a million a year in interest—something he says South Pasadena "can't afford." 

"You can definitely mark that up as a lesson learned," responded the City's Finance Director Chu Thai. "I believe we were very aggressive in 2009. Council was very anxious to get the projects going. We were ramping up public works, and the City Manager's office was very ambitious about getting public works to work on the projects."

Replacing our Sewer System

While talks of water capital improvement projects have been in the works for the past few years, the City also entered a Consent Judgement with the Attorney General in November in response to its 27 raw sewage spills and . 

“[The Attorney General] merely adopted the program that the City was already planning to implement—with the exception that they accelerated the time schedule,” 

The negotiated plan asks that $4.5 million be spent towards the sewer system within four years and an additional $6.5 million in the following five years. (The agreement also mandates that the City pay $50,000 in attorney fees, $50,000 towards an asset management program and $175,000 in penalty fees.)

The slated sewer improvements include updating the City's 58 miles of 75-year-old sewer lines to prevent future spills. First up: replacing the Wilson Water Pump, which is slated to go out to bid in April 2012.

The Next Step 

City Council will be asked to approve these proposed water and sewer rate increases Jan. 18, and a public hearing is slated for March 7.

City staff says it will continue to consider pay-as-you-go or spreading out the bonds for future projects, as directed by City Council Wednesday.

"The City needs to aggressively deal with the serious problems as soon as possible. The less serious problems can be evaluated carefully to see if pay-as-you go or spreading the borrowing would work," explained Thai. 

Click on the attached PDF to view Chu Thai's presentation to City Council Wednesday. 

Related: 

UPDATE: City Responds to Sewage Spills


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