Glendale Residents Don’t Need Political Spin
The 8/6/2014 water rate increase was passed to eliminate a $10 million deficit. The GNP reported that city officials said this deficit was due to GWP, in the mid 2000s, continuing to make capital improvements without a rate increase. I don’t doubt the deficit; but, let’s be forthcoming and honest about its cause–let’s tell it like it is.
Beginning in 2006, when the California Supreme Court declare water service was governed by Proposition 218, and ending in 2011 (when the practice was discontinued) the City transferred over $20 million of water revenues to the general fund instead of using them for the utility. This violated Proposition 218’s requirement that such revenues be used exclusively to provide ratepayers with water service.
Had the City not violated the State Constitution, the water utility would now be $10 million in the black rather than 10 million in the red; had the city followed the law, then, instead of needing a rate increase, the water utility would have a $10 million reserve.
The Glendale Coalition for Better Government has sued the City to return those illegal transfers to the water utility. But the law only allows the Coalition to go back four years. This represents a $8.32 million illegal transfers. While $8.32 million won’t entirely wipe out the $10 million deficit it would come close; and; it would certainly render the size of the 8/6/2014 increase unnecessary.