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Politics & Government

Sierra Madre Approves Controversial Water Rate Hike

In 4-1 vote, the City Council approved the second reading of Ordinance 1312, raising rates on residents and implementing a tiered rate structure for the first time in the city.

The Sierra Madre City Council in a 4 -1 vote approved the second and final reading of an ordinance adopting a tiered water rate structure for the city and raising water rates across the board for Sierra Madre ratepayers. The vote follows passage of the last month.

Council Member MaryAnn MacGillivray was the lone dissenting vote, taking time to repeat her concerns with the ordinance from a prepared statement first read last month.

Echoing statements made at previous meetings, MacGillivray suggested the first year's increase be initiated in two phases, each of a lower percentage than the total approved, allowing ratepayers to adjust to the increase more gradually and adjust their usage habits accordingly.

Despite MacGillivray’s protest, the other four members of the council voted to approve the ordinance as written.

Opposition to the rate increase has been ongoing throughout the months-long process, with mounting a last year, as well as maintaining a steady line of at council meetings as the increase was discussed over the months.

Council Member Nancy Walsh spoke first in favor of the ordinance’s passage, saying, “We’ve done as much education as we can, and I’m ready to move forward.”

Council Member Moran agreed that the ordinance should be approved as written.

“I’m very cognizant of the fact that this is going to be a burden,” Moran said. “I think that we’ve listened to what the people have had to say over the last six months. ... I believe that what we have presented in combination with [proposing an oversight committee] ... will once again make sure that this is an incredibly transparent process.”

The rate hike approved Tuesday calls for a 7.5 percent increase per year over the next three years, beginning on July 1. The fourth year will have a similar increase, though slightly lower than the full 7.5 percent.

The ordinance also allows for the City Council to revisit water rates on an annual basis and “the rates will be reduced if possible,” according to Public Works Director Bruce Inman, who gave a presentation on the ordinance at Tuesday’s meeting.

The primary reason for the rate hike, according to staff reports and council discussion, is to satisfy a water bond covenant that calls for the water fund reserve to maintain an amount totalling no less than 120 percent of operating expenses. The new ordinance will satisfy this covenant, with which the city is currently out of compliance, within four years.

“The increase will create a a projected increase in the water fund reserves of nearly a half a million dollars a year,” Inman said. But City Manager Elaine Aguilar quickly corrected Inman, saying that the $500,000 surplus would be accumulated "by year four," rather than each year.

Thereafter, the increased revenue will begin building the water fund reserve to a level that will allow for future capital improvements to the city’s aging water infrastructure.

"We have a fiduciary obligation to act on behalf of this city to secure the reliability [of the water system]," Mayor Pro-Tem John Buchanan said at a previous meeting, a sentiment he echoed at Tuesday’s meeting.

Though residential usage and meter sizes vary throughout the city, estimates from staff reports say the rate hike will mean an average increase of around $4 per month, per household.

The ordinance also provides for the potential of an exemption for those meeting certain low-income standards as well as a 1 percent reduction in the amount paid to the water portion of the city’s Utility Users’ Tax, dropping that rate from 10 to 9 percent.

An item to create a citizen oversight committee to review the progress of the rate increase was not included in the ordinance, but has been added to the agenda of a future meeting of the City Council at the request of Council Member Josh Moran.

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Editor's note: A previous version of this article quoted Public Works Director Bruce Inman as saying the rate increase would create a $500,000 surplus each year. City Manager Elaine aguilar corrected Inamn on this, saying the surplus would be accumulated over four years, rather than over each year. Patch regrets the error.

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