Op-Ed: Long Beach water-rate increase

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Never in the recent history of Long Beach have water rates been raised by double digits– and the current proposal, a 12%-rate increase, will hike rates 22% higher since just 2017.

Examining the surrounding circumstances of this attempted money grab leads to a possible explanation: Long Beach is in trouble financially and needs every dime it can muster to cover mounting pension obligations, city management over-bloated salaries, and a council that has champagne tastes.

A common mantra in our city government is “we need to find new revenue streams.”

The basis for the rate hike:
The June 13, 2019 Water Board meeting concluded a four-session Budget and Rates workshop conducted by city staff.
The proposed annual budget differs from past years with notably higher levels of reserves (up approximately 30% from recent years) and large expenditures costs for capital improvement program (CIP) projects. These projects include replacement of all water meters with electronic meters and rectifying deferred maintenance of city water wells.

LBRC and CARP question all these items for two reasons. First, the Water Department historically has not had a need for large reserves. Second, capital costs are normally spread over many years. It’s as though the budget was deliberately designed with a big shortfall to justify a big rate increase, and then later the reserves could be tapped as a “surplus” for the city’s general fund.

Water board members did concede to the audience that the rate increase owed in part to a desire to transfer some water revenues to the city’s General Fund in support of Measure M, but that is nowhere to be found in the budget presentation.

Such a transfer has been a bone of contention in Long Beach, with two lawsuits filed maintaining Prop 218 is being violated. Prop 218 prohibits local governments from charging more than it costs to provide utility service and from using utility fees for non-utility purposes. In 2017 the city settled one lawsuit. The settlement required the city to repay $12 million (a fraction of what had been illegally appropriated from the water department over a number of years) and to cease appropriating water department revenues. In an attempt to recoup that revenue stream, the city put Measure M on the ballot in 2018.

Measure M permits transfer to the city’s General Fund up to 12% of all annual water revenue. Measure M proponents told voters that this revenue, that consumers had been accustomed to paying, was required to maintain city services like police, fire, libraries and parks. Voter approval of Measure M set the stage for the water-rate increases.

Opponents again questioned the legality of the transfer, and filed a lawsuit maintaining that Measure M, whether approved by voters or not, is illegal and violates the state Constitution. This lawsuit is pending.

Both CARP and LBRC maintain that the city’s appetite for increasing taxes and rates needs to be tempered. Long Beach enjoys ample sources of income. We have a port, an airport, the tourist industry, tidelands and uplands oil revenue , property taxes, state and federal grants and a 10.25% sales tax. We need to refrain from unnecessary expenditures like a $100-million dollar swimming pool on the beach, a half billion dollar civic center, a million-dollar media wall, $750 thousand for furniture etc. When added to the escalating cost of pensions, these additional cost commitments place a burden on the people.
This water rate increase will affect all residents but in disproportionate ways.

Those without discretionary income will find the monthly increase (estimated at $6 per month) a hardship. Somewhere in Long Beach, a child will not get a sweatshirt or a daily bath and trees and plant life will suffer.

City officials make claims of concern over rent increases– and yet if the city supports raising water rates, they know it will be passed on to tenants in the form of rent increases.

Members of CARP and LBRC are asking the city council to manage the budget prudently, comply with State law and oppose this rate increase.

Residents (account holders) are urged to protest the rate increase by writing the Water Board at 1800 E. Wardlow Long Beach 90807 or email [email protected] (and/ or attend the prop 218 hearing on Aug 29). Account holders should also write to the city council, who will vote on the rate increase in September.