Plan To Raise LADWP Customer Water Rates Approved

LOS ANGELES (CBSLA.com) — The board that oversees the Los Angeles Department of Water and Power unanimously approved a plan Tuesday to raise customer water rates to help pay for upgrades on the city's aging pipe system.

The Board of Water and Power Commissioners voted 4-0 in favor of the rate hikes, with one member absent. The proposal now goes to the Los Angeles City Council for consideration.

The typical single-family household could see bills go up by 4.76 percent, or $3 per month, each year, for the next five years, under the rate
hike plan.

Fred Pickel, the independent watchdog of the LADWP, signed off on the plan last week as being "reasonable." But he expressed concern that the department may not have enough staffing to actually make the pipeline improvements fast enough.

When Commissioner Jill Banks Barad asked whether this meant improvements would be delayed, despite customers paying more, Pickel responded that the proposal includes provisions for monitoring the progress of the projects and allows for necessary changes to be made to the rate structure.

Commission President Mel Levine pointed to the potential for the LADWP's bond ratings to drop, and large pipe bursts such as the one that flooded the UCLA campus, as reasons he voted for the higher rates. "The risk of not passing this increase is certainly substantially greater than any risk of passing it," he said.

A monthly bill of $57.79 for the typical residential water user would increase to an average rate of $72.90 at the end of the five years, according to an example in a staff report.

Residential customers who use less water could see smaller hikes, while heavier users could see bigger increases. Residential users could see annual monthly rate hikes of between $1 and $11. Commercial users would see monthly bills go up between $3 and $60 annually.

The rate increases have been billed as a way to raise money to replace or fix LADWP's aging system of water pipes. Mayor Eric Garcetti backed the plan this week, saying that while "no one likes to raise rates," the "price of inaction will be much higher for all of L.A.'s residents."

He also called for a formal review in two years to see if changes need to be made in the promised improvements.

The Office of Public Accountability, headed by Pickel, issued a report expressing the opinion that the LADWP's water rate proposal is "just and reasonable." The report noted that most of the revenue will go into capital projects, while some will go toward higher operating costs and the unfunded employee pension liability.

The report also found that while the purpose of the rate increase is to help upgrade aging pipelines, "the pace is too slow for the desired long-run replacement cycle." It also raised a concern that "staffing levels will be inadequate for the growing levels of planned capital project expenditures, in part due to the anticipated personnel retirements and constraints on outsourcing."

The average or low water user is likely to see bills grow 4 percent each year, while heavy water users could see bills go up by 7 percent per year, with the biggest increase in the first of the five-year plan. Rates could be higher than anticipated if current drought persists, according to the report.

A typical single-family home could see a bill of $62.89 per month go up to $68.73 in one year, then to $70 per month after three years. In the final year, the bill could go to $74, according to the OPA's report.

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