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City Staff Again Recommends Significant Santa Monica Water Rate Hike

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Pacific Park, Santa Monica PierHarding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP


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By Jonathan Friedman
Associate Editor

December 12, 2014 -- Members of the Santa Monica City Council had a skeptical reaction in October when presented with a proposal for a nearly 80 percent water rate hike over the next five years.

A major complaint was the consultant’s report that was supposed to justify the increase had not been finished. 

Now, the report has been completed, and says the proposed hike is the best method for Santa Monica to reach its goal of water self-sufficiency by 2020. The city currently receives a significant amount of water from the Metropolitan Water District.

“[The hike proposal] provides the City with the most financial stability to adjust to changing conditions and fund the projected programs and projects that will be necessary to reach self sufficiency, promote additional water use efficiency and remain financially stable during the projected level of continued drought in California,” the report from Kennedy/Jenks Consultants says.

Staff again will present the hike proposal to the council next Tuesday. Under the proposal, water rates would go up 9 percent in the first year and 13 percent each year for the next four years.   

There are two other proposals on the table. One would increase the rate by just 2.5 percent, in line with the consumer price index. In the other one, the rate would go up 9 percent each year for five years.

Regarding the low-increase proposal, Public Works Director Martin Pastucha wrote in his report to the council, “This option is unsustainable, as continuing on this course would result in a negative fund balance by FY 2016-17.”

Pastucha wrote that the medium proposal would require the City to make capital program changes to accomodate for the loss of revenue, which “may result in a delay in reaching the self-sufficiency goal by 2020.”

If the council chooses to go forward with any of the three proposals, a public hearing would be set for early next year (staff recommends Feb. 24). If approved, this would be the first non-CPI water rate increase since 2008.

At the October meeting when the rate hike was proposed, the council also voted in favor of the so-called Sustainable Water Master Plan that is supposed to close the gap between local water demand and the available supply.

Also at the meeting, the council discussed a Water Shortage Response Plan that would include restrictions to reduce water use by 20 percent during the ongoing statewide drought.

The plan, which will go before the council next month, includes a Water Use Allowance for each customer, residential water conservation thresholds, drought surcharges and a variance process.

Single-family home residents would use no more than 275 gallons of water per day, while those living in multi-family dwellings would use no more than 137 gallons. The plan also calls for fines against those who do not stay within the threshold.


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