City: Programs may not come cheap
CITY HALL — Elected officials want justification for a slew of utility hikes being proposed for Santa Monica residents.
Santa Monica City Council-members said on Wednesday that they need more information to understand why a series of utility rate service fee increases are being proposed, before they approve them.
The request comes after a May 17 staff presentation in which the finance department proposed to dramatically increase city water, wastewater, stormwater and solid waste fees to shore up City Hall’s declining utility funds.
“We are not going to raise the rates without pain, because we are going to have to go through some pain, too,” said Councilman Ken Genser to Craig Perkins, director of the city’s environmental and public works management department, which oversees the city’s water and solid waste utility services. “What I want to know is, when rate payers pay their check every month, where is that money going?”
The City Council has requested the information before it takes action on the rate increases on June 14.
Santa Monicans can expect sudden to gradual rate increases in water and solid-waste fees over the next few years because officials said expenditures are exceeding revenues for those services. City Hall’s report details how solid waste, water, wastewater 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 over the next few years, depending on the rate increase.
TAKING OUT THE 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 — $4.5 million in 2002 — is estimated to have fallen more than $500,000 since then. To prevent this decline from reaching a $1.2 million deficit within the next year, city staff is suggesting rate increases for the service by July.
That means the average household bill of $62 for solid waste removal would jump to $74 for the one-year plan, and to as much as $82 for three years.
Staff 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 for employees, and vehicle maintenance and fuel costs.
According to staff, 18.4 percent of the solid waste fund’s operating costs account for landfill fees that the city has to pay. Those costs have gone up 40 percent since 2001, which is rapidly depleting the fund, officials say. In addition, landfill rate increases are expected to be about 18 percent each year in the foreseeable future.
“The landfill has reached a critical stage,” said City Manager Susan McCarthy. “It presents a whole other series of issues we’re going to be grappling with, and what will be required to deal with a significant instability at this point.”
Salaries and benefits account for 47 percent of operating costs, and there has been a 10-percent increase for the past three years that’s been eating into the fund, according to staff. 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.
Elaborating on expenses, Perkins explained that a pilot program the city of Santa Monica has in place which allows businesses to save their solid food waste is more costly than what was predicted. The city collects the food waste for compost, which is re-used.
“The program is more expensive than we thought,” Perkins said. “We are not going to be able to expand it right away.”
Councilman Kevin McKeown, a proponent for sustainable measures, suggested City Hall consider adding vegetable oil waste to the list of recyclable material in the program.
He said excess vegetable oil could be used to help fuel biodiesel vehicles. He added that moves to increase the use of recyclable material, perhaps through more education, also may help reduce the need to use landfills and might save on costs.
McCarthy said part of what might be contributing to solid waste and other utility service increases, however, are costs associated with the city’s myriad of environmental programs and education, which are supported by the utility funds.
“Education for environmental programs has an effect on rate standards,” McCarthy said. “The community doesn’t get it for free.”
WATER WHOPPER 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 is 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 — $17.5 million in 2002 — has fallen to about $5 million.
Staff suggests the average household water bill in Santa Monica needs to be raised from $52.09 to $68.24 for one year, to as much as $76 under the three-year plan and $89 under the four-year plan.
The water rate increases are expected to go into effect in January of 2006.
In addition, staff said the city’s waste-water and stormwater rates will soon have to face similar hikes in July, and the next few years, respectively.
The wastewater fee increase would mean rates would jump from $37.33 to $46.66 for one year, to $49.43 for two years, and up to $49.67 for the three-year plan.
Councilman Bobby Shriver said one way the city might address its stormwater funding needs in the future — which staff said needs more than 10 years of updated fees and infrastructure — is to introduce a bond measure to voters which could raise funds.
Shriver said the move could be similar to Proposition O, recently passed in Los Angeles for the same reason.
“People are willing to spend money so they won’t get sick when they swim,” Shriver said.
Shriver referred to budget information indicating 16 tons of debris have been recouped from the Santa Monica Bay due to the city’s environmental measures.
“If you can tell people X-amount of money will collect X-amount of debris and bacteria, people may be willing to pay for that, when there is a quantitative benefit,” Shriver said.
City staff at the meeting, while not able to answer all of the council’s immediate questions concerning the need for the rate increases, attempted to explain some of the context behind the proposed fee increases.
“We set higher goals for ourselves,” McCarthy said. “So if we have been under-performing (for our own objectives), we have been out-performing other communities.”
Originally published in the Santa Monica Daily Press print edition on May 27, 2005. Read the original PDF.