The City Council put its controversial vote on water-rate increases on hold this week after Mayor Zareh Sinanyan said on Tuesday that he couldn't support a proposed bump he backed during earlier discussions.
Rather than pushing forward a plan to ratchet up water revenues by 4% over four years on average systemwide, Sinanyan said he would be more comfortable with a 3% boost across the same time period.
But during Tuesday's meeting, city officials didn't have the breakdown showing how such a 3% increase will affect the utility's bottom line as well as individual bills, so the council tabled its decision until next week.
A 3% average systemwide increase could have differing effects on customers because Glendale's water rates take into account customer class —such as single-family, multifamily or commercial — as well as meter size and water use.
In 2012, the council approved multiple years of water-rate increases that, in the end, overcharged some customers and undercharged others, prompting the utility to collect millions less than expected, dig deeper into a budget hole and necessitate a new series of rate hikes. Glendale is suing the consultant that designed the botched 2012 rates, Willdan Financial Services of Temecula, for $9.3 million.
The 4% plan that had majority support last week and was primed for a vote on Tuesday would equate to a 20.1% compounded increase over four years.
Under that proposal, a single-family customer using 1,900 cubic feet of water, or 14,212 gallons, with a three-quarter-inch water meter, would see their monthly $72.12 bill increase by $6.70, or 9%, the first year and by $17, or 24%, to $89.12 by fiscal year 2017-18.
A commercial customer using 100 hundred cubic feet of water, or 748,000 gallons, with a 2-inch water meter, would see their monthly $382.38 bill decrease by $33.72, or 9%, the first year and increase by $11.09, or 3%, to $393.47 by fiscal year 2017-18.
The 3% rate would be 12.55% compounded over four years. After a rough calculation, City Manager Scott Ochoa said Sinanyan's plan would leave the water side of the utility with $9 million to $10 million in debt — essentially leaving officials running in place as the water account is currently $10.1 million in the red.
Councilman Ara Najarian said he would wait to see the new numbers, but he would only vote for a rate increase that has the smallest impact on customers while moving the utility into positive cash flow. The 4% plan would up cash reserves to $4.4 million by 2018, which is still less than the $11.3 million required by a city mandate.
"My primary and singular objective in this process is to preserve the sustainability of our water company," Najarian said, adding that not voting for an increase at all is "just pie in the sky."
"I don't think that's responsible at all," he said, referring to Councilwoman Paula Devine's stance on the rates. Last week, she said she couldn't support any rate increase because residents have conserved.
Councilman Dave Weaver said he was tired of rate discussions — the city has been working on them for months — and wanted to vote for the 4% plan, which he described on Tuesday as a compromise. It would have a gentler impact on customers' bills than an original suggestion that would have boosted rates on a compounded basis by 21.8% over four years on average.
The council is set to meet at 3 p.m. on Tuesday in City Hall, 613 E. Broadway, to discuss Sinanyan's plan.