Council nixes water study (October 15, 2015)

With state mandate comes issues, but officials prepared to fight rate increases

ADELANTO — Lesser revenues due to state-imposed water conservation measures have added strain to the city’s public utility, which is already dealing with rising operating costs. But city officials were unwilling late Wednesday to pay nearly $19,000 for a consultant to advise them to increase rates.

We already know what they’re going to say, Mayor Rich Kerr said. They’re going to say to raise the rates and we’re going to say, ‘no,’ so why pay $18,000 to say, ‘no,’ again?

In question was a proposed five-year water rate analysis meant to determine the suitability of current rates. The last rate hike was in 2009 extended over a three-year period, but since then Adelanto Public Utility Authority revenues have remained stagnant while operating costs have gone up, officials said.

The state mandate levied on Adelanto to cut water use by 20 percent compared to 2013 baseline figures — which they have failed to meet in back-to-back months, recording 10 and 13.6 percent drops — has only elevated the issue.

Additionally, the state has since ordered the city to comply with certain conditions, which include pushing public outreach, implementing an active rebate program, auditing commercial, industrial and institutional customers and hiring two new or existing part-time employees to enforce outdoor water restrictions, among other things.

Those conditions are expected to only create another cost burden to the APUA, officials said.

We’re actually doing a pretty damn good job (of conservation), City Councilman John Bug Woodard said. APUA is not making what they did because we’re saving water. On the other hand, you can thank Gov. Jerry Brown up in Sacramento for this.

City Attorney Todd Litfin insisted the issue was not affecting only Adelanto. Most water agencies across the state were worrying about meeting bond covenants because they simply aren’t generating the same revenue as before, he said.

Backed by wide support from the audience, the Council unanimously rejected signing off on the study with a Huntington Beach-based accounting firm. Instead, officials said they preferred, if anything, to analyze rates in-house.

Vanessa Martinez, the former Assistant Finance Director who’s been retained in a consultant capacity, highly recommended performing a study, either through a firm or in-house, but acknowledged the latter would be a more drawn out process.

It could be done in-house, it will just take longer, she said. With the third party, you have the unbiased, no conflict of interest. You have that expertise.

It’s also possible the city could look into incorporating consumer price index as a component into monthly bills in order to avoid as significant of an increase as was seen in 2009. At the time, residents were livid over fee increases which saw some bills doubled and tripled. Prior to that increase, the last hike hadn’t been enacted since 2002.

Martinez and city staff acknowledged such significant increases were more likely the longer the period between them. For instance, a rate adjustment now could be under 5 percent, according to Martinez, yet prolonging an increase could result in a bigger chunk.

As it stands, the city’s rates currently fall in the middle when compared to other municipalities in the High Desert, she added.

But the Council appeared more likely to vet other options, including desalination plants, in order to stave off the increases Martinez seemed to believe were inevitable. Martinez said the city has also looked at energy efficiency for savings.

I’m not happy that we’re forcing this charge on the citizens — not just in Adelanto, but everywhere. We’re being forced to use less water, and now our prices have to go up, Mayor Pro Tem Jermaine Wright said. There’s no way in hell I’m going to vote to add more money to people who are already paying too much in the first place.

Councilman Charley Glasper called the proposed analysis, estimated to cost $18,980, ludicrous.

Woodard, meanwhile, suggested the Council consider joining a class action lawsuit if other water agencies were to ultimately seek such relief.

Source: Shea Johnson, Daily Press