> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # City service fees overflow - URL: https://www.smdp.com/city-service-fees-overflow/ - Published: 2005-05-20T15:00:00.000Z - Updated: 2026-10-23T07:10:57.000Z - Author: Ryan Hyatt - Tags: Government & Politics, Santa Monica, #archive-import *Residents face rate hikes to fix shortfalls* CITY HALL — Santa Monicans might be paying significantly more for water and refuse services as City Hall attempts to shore up declining utility fund balances. A report presented to the City Council on Tuesday indicates Santa Monicans can expect sudden to gradual rate increases in water and solid-waste fees over the next few years because officials say expenditures are exceeding revenues for those services. “The funds are going into the negative,” said Steve Stark, City Hall finance director, who presented the report to the council at the meeting. The report comes right before study sessions, beginning next week, in which the council will begin prioritizing city services for next year’s budget. The City Council is expected to take action on the rate increases on June 14. The report details how City Hall’s water, solid-waste, waste-water and stormwater fund balances have been decreasing to varying degrees over the last four years and need to be corrected to keep the bonds that support the funds in legal compliance. In order to restore the funds to a healthy level, staff has proposed to the City Council a rate schedule that would allow a “timely,” “intermediate” or “extended” recovery of the revenue stream in the next few years, depending on the rate increase. City Council members expressed some surprise by the deficits. “If these graphs were a mood detector, I’d say we were bi-polar,” said Councilman Kevin McKeown. Stark explained that revenue to shore the funds was generally not keeping up with the costs of the services. “The operating costs have been increasing, but they have not been passed on (to users),” Stark said. WATER FUND WOES The water fund supports the treatment, storage and distribution of water in Santa Monica, as well as provides fire protection through hydrants and sprinkler connections. It’s operated by three booster stations, four reservoirs and a water treatment plant. The fund also is used to support City Hall’s environmental programs. The fund, which was $17.5 million in 2002, has fallen to about $5 million currently. To correct that, city staff is suggesting a timely recovery that would require a 31 percent rate increase for one year; an intermediate recovery that would keep the increase on a sliding scale between 15 and 11 percent for the next three years; and an extended recovery that would keep the rate increase at sliding scale between 12 to 11 percent over four years. According to the staff report, that would mean the average single family water bill in Santa Monica would jump from $52.09 to $68.24 for one year, $59.90 for three years and $58.34 for four years. For a 10-unit apartment building, the average bill of $153.67 would go up to $201.31 for a timely recovery, $176.72 for an intermediate recovery and $172.11 for an extended recovery. For a medium-sized restaurant, the average bill of $1,235.66 would go up to $1,618 for a timely, $1,421 for an intermediate and $1,383 for an extended recovery. The water fund’s rate structure was originally adopted in 1996 with periodic rate increases that began in 1999. TALKING TRASH City Hall’s solid-waste fund is responsible for citywide refuse and recycling collection, and includes street sweeping and beach and Promenade maintenance. It also is used to support City Hall’s environmental programs. The solid-waste fund, which was $4.5 million in 2002, is estimated to have fallen more than $500,000 since. To prevent that decline from reaching a $3 million comfort level, city staff is suggesting rate increases. Stark explained to the council that the primary factors contributing to the depletion of the solid-waste fund had to do with landfill disposal fees, salaries and fringe benefits, and vehicle maintenance and fuel costs. According to the staff report, landfill fees account for 18.4 percent of solid-waste operation costs and that a 40 percent spike in those fees beginning in 2001 is having an impact on the solid-waste fund. In addition, landfill rate increases are expected to be about 18 percent each year in the future. Salaries and benefits account for 47 percent of operating costs, and there has been a 10 percent increase in the costs for the past three years that’s been eating into the fund. Vehicle maintenance and fuel costs make up another 17 percent of operating costs, which also have gone up about 10 percent over the past three years. The solid-waste rate increase proposals would be 20 percent starting in July, followed three years later with another onetime 4.5 percent increase; 15 and 10 percent for a consecutive two-year rate increase; and a 12 to 8 percent rate increase for a three-year recovery period. Those increases would be on a sliding scale. That would mean the average single family solid-waste bill would bump from $62 to $74 for the timely, $71 for the intermediate two-year and $69 spread out for three years for the extended recovery. A multiple-family complex would increase from $120 to $144, with the timely, $138 with the intermediate and $134 with the extended recovery. Commercial rates would jump from $157 to $188 with the timely, $181 with the intermediate and $176 with the extended recovery. A rate increase was suggested in 2003, but was never put into place. SEWAGE CENTS The wastewater fund is used to operate and maintain the sanitary sewer collection system for Santa Monica. It also is tied in with the storm drain system and City Hall’s recycled water production and distribution system. Valued at $23 million in 2002, the wastewater fund is currently worth $10 million. At that rate of decline, city staff said the fund would bust by 2007 without City Hall taking any steps to correct the problem. Stark explained to the council that capital payments to the Hyperion Treatment Plant alone account for 22.5 percent of City Hall’s wastewater budget and is expected to increase more than 30 percent the next two years. Overall fund expenditures exceed fund revenues by $4.1 million this year, and staff is expecting another $5.8 million gap for next fiscal year. At that pace, staff expects the bond to be non-compliant by 2007 if no further steps are taken. To restore the wastewater fund balance to comfortable levels, staff suggests the council consider increasing the waste-water service rate by 25 percent for a one-year recovery, 15 percent for a two-year recovery and 10 percent for a three-year recovery. That would mean the average family wastewater residential bill in Santa Monica would increase from $37.33 to $46.66 in the drastic scenario, $42.93 with the two-year recovery and $41.06 for the three-year recovery. The wastewater fund rate structure was adopted in 1996\. A rate study was conducted in 2003, after which Stark said a staff recommended rate increase was not carried out. RIDING THE STORM OUT City Hall’s stormwater fund reached $2 million in 2003, dipped in the past two years, and is expected to peak slightly over $2 million this year. However, if the stormwater fund is not shored up, the fund will continue to decrease and is expected to hit zero in 2009. At the same time, the fund managing Santa Monica’s stormwater — runoff rainwater that ends up in the ocean — is risking future costs if it’s not compliant with the Regional Water Quality Management Board, a government entity that oversees municipal handling of stormwater. Since City Hall’s stormwater fund is the least in jeopardy, officials have put off further discussion of the fund to a study session later this summer. *Originally published in the Santa Monica Daily Press print edition on May 20, 2005.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/052005.pdf?ref=smdp.com)