Budget adoption session is set for June 21
CITY HALL — A series of proposed utility rate hikes that would affect Santa Monica in coming years is set to be hashed out tomorrow.
The City Council will be considering a staff report on Tuesday calling for an increase in solid-waste, water and wastewater service rates in order to shore up the city’s declining utility funds. Staff members are asking new rates be approved during next year’s budget adoption session on June 21. Some fees would go into effect by July.
Officials said the increases in water and solid-waste fees are needed because expenditures are exceeding revenues for those services. City Hall’s report details how solid-waste, water and waste-water 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.
The staff report was requested after a May 25 budget study session presentation in which Councilmen Ken Genser, Bobby Shriver and Herb Katz said they were not “sold” on the justification for rate increases and needed to be if they were to approve them.
Councilman Kevin McKeown said he has reviewed the material prepared by City Hall and has serious reservations about moving forward with rate increases.
“For me, the big thing is the element of surprise and discomfort of being asked to raise rates so suddenly with very little prior discussion,” McKeown said. “If I am tending toward any rate increase, it would be toward the minimum recovery option, which would give us a year to ask questions about where we’re going.”
The report attempts to address council questions about factors affecting service costs and requiring City Hall to dip into its utility funds. Higher expenses for electricity, fuels and employee insurance, among others, are cited as expenses City Hall has managed to prevent passing on to users in recent years.
In addition, the report elaborates on efficiencies City Hall strives for in the services it provides, without significantly increasing its number of staff.
GARBAGE COSTS 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 over one year, and to as much as $82 within three years.
WATER DOLLARS 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 within three years, and $89 within four years.
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 face similar hikes.
The wastewater-fee increase would mean rates would jump from $37.33 to $46.66 for one year, to $49.43 within two years, and up to $49.67 within three years.
Originally published in the Santa Monica Daily Press print edition on June 13, 2005. Read the original PDF.