LADWP proposes 600% rate increase

Independence looks at first sewer fee hike in 34 years

The Los Angeles Department of Water and Power (LADWP) is proposing a 600% monthly sewer rate increase from $3.50 to $21 for single-family residence users of the Independence Wastewater System. Monthly rate increases for retail businesses would leap from $4.48 to $26.88, and businesses such as restaurants, bars, hotels, and office buildings would see an increase from between $10.50-$22.75 to $63-$136.50/mo.
Residents of the town of Independence voiced their concerns regarding the increase at the public meeting hosted by LADWP on Tuesday, Sept. 22. Attendees were noticeably agitated, worried that the increase may lead to store closures, town debt, and pressure on those with fixed incomes and minimum wage workers to pay the full rate.
To quell frustration at the meeting, DWP representative and Los Angeles Aqueduct Manager Gene Coufal reminded residents that single-family residences have been paying $3.50 since 1975. In contrast, Mammoth Lakes residents pay a $17 per month flat rate, Bishop residents pay $20, and June Lake pays $21.
Independence resident Nina Weisman asked Coufal why the town hadn’t seen a more gradual rate increase since 1975, rather than receiving this kind of shock treatment in 2009. Coufal said it was just an oversight on the part of the department—an oversight that has lasted 34 years.
The current sewer rates generate annual revenue of about $16,000. However, the average annual cost for operation and maintenance over the last 10 years is $53,000. This figure does not include the annual capital improvement costs of $30,909, averaged over the last 10 years. The proposed rate increase will generate revenue of $105,275 per year.
According to the LADWP public notice, the proposed rate increase was calculated to provide necessary funding for the operations, maintenance and upgrade costs for the Independence Wastewater Treatment Plant and sewer collection system. A capital improvement fund also must be established to pay for upgrades to the aging collection system, most of which was installed in 1936.
In 1936, the LADWP’s office headquarters was located in Independence, and the town’s population was mostly comprised of LADWP employees. That year, Inyo County granted the department permission to construct, operate, and maintain sewer pipe lines within the unincorporated town of Independence. In 1974, the LADWP received a grant to construct the Independence Treatment Plant. Prior to 1975, there was no charge to users of the system. However, on Nov. 13, 1975, charges were established in order to cover operating costs, and have not been changed since.
In addition to increasing the annual rate, the LADWP hopes to find another operator (be it a private firm or Inyo County) to take over management of the plant and sewer system after the new rate has been implemented. Residents at Tuesday’s meeting viewed this move as outright abandonment of a town the DWP has reliably served for 73 years. If the department passes ownership to a new entity, the town may be looking at further financial obligations in the form of liability insurance as well as increased operating costs.
However, the most immediate worry, for most Independence residents, is whether or not the proposed rate will be passed at the LADWP Board meeting tentatively scheduled for Dec. 15. According to Proposition 218, the town’s property owners have the right to vote on any proposed tax/rate increases for municipal services.
If enough property owners of Independence send written protests to the LADWP Bishop Office by Wednesday, Sept. 30, the Board cannot legally pass the rate increase. Specifically, 50 percent of the town’s property owners, plus one owner, must submit written protests for the rate proposal to fail. This detail, however, was not included in the LADWP public notice sent to the residents of Independence.
According to the County’s Assessor List, 190 protest letters are required to prevent the rate increase. This figure does not include property owners associated with the DWP. Protests submitted by owners who hold more than one property in town will have more weight in the vote.
At Tuesday’s meeting Inyo County Clerk, Mary Roper, asked Coufal why Prop. 218 was not mentioned in the public notice. He said LADWP’s lawyers approved the notice, but may have overlooked that detail. Roper said the lack of this information is misleading to the public. Coufal said he would check back with his lawyers to see if any further action should be taken to inform the public of their rights under Prop. 218.
If property owners don’t take action, the proposal will likely be passed, leaving Independence residents without a chance to negotiate for a lower or more gradual rate increase. Passage of the rate will increase in three, six-month phases. For example, single-family residential customers’ monthly sewer rates will be increased as follows: $7 effective Feb. 1, 2010; $14 Aug. 1, 2010; and $21 Feb. 2011.
Written comments must be received by mail in Bishop by Wednesday, Sept. 30, in order for the LADWP Board of Water and Power Commissioners to include them in a package prepared for the December meeting.
The public may also attend and supply written comments at the public hearing scheduled tentatively for 12:30 p.m. on Dec. 15 at the LADWP Headquarters, 111 Hope Street, Room 1555, Los Angeles.