Some Montebello residents will see a 50 percent hike in their water bill starting next month, the result of the city council’s approval last week of a rate increase to help offset a deficit in the city water utility fund.
The rate will go up another 25 percent in July 2014 in the effected area, which includes properties located north of Lincoln Boulevard and in the city’s southside, adjacent to the I-5 Freeway.
It’s been nearly 10 years since the last rate increase and city officials say the rate hike is needed to deal with the utility’s nearly $380,000 operating deficit in next year’s fiscal budget. The system has been operating at a deficit since 2007, but council members, who not too long ago faced a $17.3 million deficit, are pushing to balance the city’s budget and say the operating shortfall cannot continue.
A recently completed “Water Rate Review and Analysis” found that customers of the city’s water system, maintained and operated by the California Water Service Company (Cal Water), on average pay $64 every two months for their service, while customers of Montebello’s four other water providers pay about $115 for the same service.
The rate hike will affect 1,647 mostly residential customers beginning Aug. 1st.
Councilman Jack Hadjinian said he sympathizes with those facing the price jump, but it is necessary. He said other ratepayers are unfairly subsidizing the low rate paid by some residents.
“I don’t know what’s worse, the 50 percent increase or that [other] people are subsidizing the people in the affected area,” Hadjinian said. “As a city, we’re not in the business to make money, we’re in the business to provide services,” he said. “But we have to be able to afford those services.”
Ben Caragan, one of the consultants who conducted the water rate study, told council members that the city’s water rates have remained flat since 2004 and an increase is needed to address overdue structural improvements to ensure continued reliability. He said current rates are insufficient to cover the cost of operations, maintenance, capital improvements, importing water and pumping ground water, which have doubled.
Angry over the dramatic hike, a number of residents at the July 10 council meeting blamed the city’s “mismanagement” for the failure to increase rates slowly over time.
“Its not the people’s fault,” Montebello resident Anna Arriola told the council. “The city should have raised the rates when the city realized there was no money.”
Hadjinian acknowledged that there had been some mismanagement by previous councils.
“They put this on the back burner and now we have to pick up the difference,” he said, defending the council’s action.
Fearing that the jump could be too high for some residents, some of the speakers called on the council to look for programs to help residents unable to pay the increase.
The rate hike will not personally affect Vivian Romero, who nonetheless told the council that righting the city’s “mismanagement” should not be put “on the back or shoulders of people with low- or fixed-incomes.”
Councilman Frank A. Gomez said the inability of previous councils to make tough decisions and the water system’s decaying infrastructure are to blame for the current situation.
He said the people of Montebello should learn from “past poor decision making” by the people they elected to make decisions for them.
According to the water rate study, about $4.9 million in immediate improvements are needed. About $44.8 million more will be needed to pay for a long-term replacement program to improve the water flow, prevent ruptures and reinforce the system for natural disasters. The rate hike it expected to generate a $230,000 annual surplus, which can go toward capital improvements.
Caragan also urged the council to review rates annually and to consider leasing Montebello’s ground and water rights.
Councilman Art Barajas said the city’s water rights are assets that could potentially generate money in years to come.
“At the end of the day, we need to be responsible with the way we handle our assets,” he said.
As required by law, public notice of the proposed increase was provided. Two public outreach meetings were also held prior to the vote. Only four written protests were received by the city, far below what was needed to prevent the council from voting on the increase at the June 10 public hearing held during the council meeting. Hadjinian said he was a “little disappointed” by the poor turnout at those meetings.
“This was their opportunity to express their concern,” he said, but they did not attend.
Only Mayor Christina Cortez voted against the rate increase. She is concerned many people will not be able to afford the rate hike, despite the low turnout at recent meetings.
“We keep saying there’s nobody here from that area, [that’s] true, but guess what, we were elected to represent those people.”