City Council Approves Water Rate Increases

Local residents and businesses will soon pay more for water.

The City Council on Monday unanimously voted to raise water rates starting next month and again in January.

“It’s critical that we turn the valve and the faucet and the water comes out,” said Vice-Mayor Andy Wilson.

City staff is recommending two increases. The first 7.1% increase would take place on April 1 and a 7.2% increase would go into effect at the beginning of the year.

PWP bills customers every two months. According to information released by the city over the past several months, PWP customers could see a 13 to 17% raise in their water bills over the next year as new rates go into effect next month.

“It’s a conundrum for people to say I am doing what you are asking, I am using less water, but my rates are going up,” said Shari Thomas, PWP assistant general manager.

PWP has a service area of 26 square miles, serving a population of 172,000, with more than 38,000 water accounts about 16% of the accounts are outside of Pasadena.

The water system itself consists of 520 miles of water mains, seven active wells, 14 reservoirs and 19 booster stations. Many of the original water mains actually date back nearly 100 years, said PWP Engineer Chris Ojeda in a meeting last week.

The city operates the water system as a self-supporting enterprise. To ensure financial stability, PWP prepares a five-year financial plan that is updated annually and includes revenue requirements to meet all operation and maintenance expenses, debt service requirements, annual system improvements, replacements of capital infrastructure, and other costs. The five-year plan is a critical component of preparing the annual operating and capital budgets for the Water System. The five-year financial plan prepared for FY2022 through FY2026 determined that revenues from projected sales and existing rates are insufficient to recover projected expenses.

“The elephant in the room is all of the state mandates for water conservation and new construction, along with the inequitable state water structure,” according to Councilmember Felicia Williams. “This puts the burden of rate increases on our residents and businesses. At some point we should address that.”

After the public hearing, the City Council unanimously approved the first reading of the amended water rate ordinance.

The Water Rate Ordinance sets forth the rates for water and water service to be charged and collected by the Water Division of the city, according to a city staff report.

The rate hikes are required because of increases in the cost of purchased water from the Metropolitan Water District (MWD) as well as higher departmental operating and maintenance costs.

The increase in the city’s commodity charge will provide additional annual revenue of approximately $1.5 to $2 million while the increase in the Distribution and Customer Charge (D&C) will provide additional annual revenue of $1 million.