Los Angeles Sanitation Rates Going Up?

Los Angeles - Without years of rate increases, the outlook for the city's 6,700-mile sewer system would be "very bleak," the head of the Bureau of Sanitation told a Los Angeles City Council committee today.

Enrique Zaldivar told the Energy and Environment Committee that his department plans to seek 10 years of rate hikes, which would mean an average increase of $34 per year. That would raise the monthly sewer service charge on DWP bills from about $30 today to $58 in 2020.

Zaldivar said the rate increases are necessary because the Bureau of Sanitation is dramatically under-funded for the amount of infrastructure work required to modernize the system, fix emergency breaks and be proactive in preventing major spills.

The city's sewer service rates are at the low end of California municipalities, behind San Francisco, which charges $85 per month, and San Diego, which charges $48 per month, according to a Bureau of Sanitation report.

"In the past when we chose not to do it the proactive way, we ended up doing it the mandatory way, by court litigation (after spills)," Zaldivar said.

He said a proactive approach has worked. Five years ago, the department's crews would fix two sewer system breaks per day. It's now down more than 80 percent -- to about two per week, he said.

Over the last two decades, the city kept customer rates mostly flat, and instead borrowed heavily to fund capital improvements and emergency repairs. The city also received more than $1 billion in federal clean water grants that helped cover the rising cost of infrastructure repairs to the sewers and water treatment plants.

About 50 percent of the city's sewer system is 70 years old, close to the average 80-year lifespan of municipal sewer systems, according to the Bureau of Sanitation. Twenty percent of the pipes are older than that.

Under its current budget, the Bureau of Sanitation is on track to replace the sewer system every 168 years, more than twice as long as advisable, officials said.

"To put it in perspective, the average homeowner spends about 2 percent of the value of their house on unkeep," said Lisa Mowery, who manages the fund that pays for all the sewer improvements. "That's what we're targeting. We just have a much bigger house."

Mowery said the estimated replacement value of the entire system is $20 billion, which amounts to a 2 percent annual improvement cost of $400 million. "We're nowhere close to that," she said.

As costs have gone up, the department has tried to cut. It has reduced staffing by 15 percent over the last three years, trimming the size of the department to its lowest level in 20 years. It has also restructured its debt obligations to save about $15 million per year.

"We're at the point now where we're running out of things to tighten," Mowery told the committee.

The proposed rate increase would also create a special fund to help property owners fix unexpected sewer system breaks. Property owners are responsible for the cost of fixing the nearly 11,000 miles of pipes that connect toilets, sinks and showers to the main sewer system.

Zaldivar said those unexpected breaks can cost homeowners $10,000-$25,000. The rate increase would help fund low-cost loans to property owners who have trouble paying the repairs.

Councilwoman Jan Perry, who chairs the Energy and Environment Committee, said she expects anger and frustration over the proposed rate increases.

"We have to communicate to people that our city is growing and that the infrastructure has not kept pace," she said. "I think that we have to be very forthright and very open with the public to educate them about what the risks are if we do not update our infrastructure and how that directly impacts them."

The Bureau of Sanitation will be conducting a 45-day public outreach campaign to explain the proposed rate hikes, which would keep rates in the middle of other large cities. The department hopes to have the new rates in place by Jan. 1, 2012.

The bureau will have to make the case to the public that its goal "from the beginning to end of the system is to maintain the integrity of the environment that we are there to protect: the streets, beaches, the L.A. River, Ballona Creek," Zaldivar said. "It's important that we safeguard the environment."