Editorial News Alert: L.A. City Council Dramatically Increases Sewer Rates by 22%
On Tuesday, May 14th, the Los Angeles City Council approved increasing sewer rates by a whopping 22% for multifamily properties (and 27% for single-family properties) with 6 additional increases planned over the next 3 years resulting in the DOUBLING of current rates by 2028. The increase was approved on a vote of 11 to 4. The issue received considerable attention and discussion thanks to Council Member Monica Rodriguez who has steadfastly been the champion for all ratepayers, including rental housing providers, requesting an amendment for a simple verification of the proposed rates by the Office of Public Accountancy (OPA) prior to their final approval.
AAGLA attended the City Council in-person and strongly advocated against the rate increases suggesting they be reconsidered due to the financial strain being experienced by housing providers following four years of no rent increases and only a lower rate increase granted for the current year on top of unpaid COVID-era rent. We urged the City Council to have the rates verified by OPA (in support of Rodriguez’s amendment) and for OPA to return with alternatives to the rate increases, including potential cost savings within LASAN. Unfortunately, AAGLA was the only public speaker on this item.
The modest request by Council Member Rodriguez for verification of the new rates and the specific amounts needed by LASAN to meet its bond obligations this year sparked a huge debate among those members on the City Council that wanted this item forced through without any substantive consideration by the City Council, which included President Paul Krekorian and Council Members Katy Yaroslavsky and Bob Blumenfield (hereinafter, “the Jam Squad”) versus those City Council members representing primarily lower-income areas that included Council Members Monica Rodriguez, Kevin deLeon, Tim McOsker, and Imelda Padilla.
It was the liveliest debate we have seen in many years on any issue before the City Council. How did we get here? The proposal for this enormous increase was brought forward on Friday, May 10th to the Energy and Environment Committee Chaired by Council Member Yaroslavsky. At the meeting, LASAN did a lengthy presentation about why they need the additional money created by the increased rates, including aging infrastructure, increased costs due to the significant raises approved by the City Council recently, bond obligations and various other factors.
As is the modes operandi for the distasteful subject of massive rates increases impacting all city residents, Chair Yaroslavsky quickly pushed the item through her committee. Council Member Blumenfield offered his assistance as Chair of the Budget and Finance Committee, where the item was to be heard next, by waiving consideration of the issue entirely by his committee. Suddenly, the rate increases appeared on the agenda of the full City Council on Tuesday, a mere 2 working days after the original hearing by the Energy and Environment Committee, which is lightening speed for any issue to reach the full City Council. In fact, both Council Members Rodriguez and de Leon called out this “jam job” and LASAN’s spokesperson admitted that she had met with several council members offices only the day before the full City Council meeting.
Council Member Rodriguez urged adoption of her amendment to instruct the OPA to validate the rates before they were adopted to ensure that the increase proposed are actually in alignment with the needs of LASAN, that they are reasonable and necessary and for greater transparency. She also argued that it is the City Council’s obligation not to take the huge economic strain placed on all ratepayers due to COVID-19 lightly. Council Member Yaroslavsky spoke in strong opposition to the amendment arguing that the increases were necessary because sewer rates had not been increased in five years and called the 7 increases over the upcoming 3 years “not insignificant” – in what may be the biggest understatement of the year!
It turned into a toe-to-toe match between Council Member Yaroslavsky arguing that no one needed to see the numbers again based on the consultants hired by LASAN to validate the rate increases and Council Member Rodriquez arguing that there was no harm in creating more transparency by having an existing city department, OPA, do verify the rates with a report back due in 30 days. The head of OPA acknowledged that his department could provide such a validation on the initial 22% increase before the October 1st implementation date and that there were already experts on staff.
Council Member Blumenfield jumped in trying to dismiss the City Council’s pivotal role in setting the rates by claiming that the City Council was not voting to raise the rates, but merely to let the process go forward for the proposed rate increases. Council Member de Leon called him out on this extremely misleading statement saying, “While this may not be a vote on an increase, it is tantamount to a vote on an increase and my be a fait accompli.”
As the City Attorney then explained, the proposed rates must go out for public notice to all ratepayers and to stop them from taking effect, a protest of more than 50% of the ratepayers must voice their opposition. However, as anyone involved in government knows, 50% of the population (ratepayers or voters) NEVER actually vote. It is always a tiny fraction of the total that bother to send in any type of communication whether for or against. So, as rightly stated by Council Member de Leon, the City Council’s vote to allow the proposed rates to go forward IS a vote to increase the rates.
Exasperated by the vigorous opposition to her modest amendment for a validation of the rates within 30 days, Council Member Rodriguez stated, “I’ve never seen such angst over greater accountability and making sure that we can be transparent about this and that we can feel very comfortable about what is being proposed.” Followed by “what is the fear?!” Further, she stated her objection to the entire process, saying “It was already baked into the budget and assumed the Council would just jam it through”, which means that the City was already relying on the increased funds from the rate increase to cover costs in the budget (remember, Council Member Blumenfield is Chair of the Budget and Finance Committee). It is also worth noting that earlier during the same meeting the Council approved the hiring of a new executive to head the Los Angeles Department of Water & Power (LADWP) for a salary of $750,000 per year.
Council Member Yaroslavsky then threw in a monkey wrench calling into question whether OPA had the proper “authority” to do the work. Council Member McOsker then jumped in reading from the Charter and stating that there is language to allow such additional work to be assigned by the City Council. However, President Krekorian countered that he didn’t think that provision was relevant arguing that the creation of OPA was to look at water rates at LADWP and that he would support the motion to approve the increased rates without the amendment to verify them first by OPA.
Council Member Rodriguez countered and said that the sewer rates are based on the water usage rates, so there is a sufficient nexus and urged adoption of the amendment. Council Member McOsker then flipped and said that because there was ambiguity as to the charter for to do the verification that the amendment should be sent back to Council Member Yaroslavsky’s committee for further consideration. His motion was seconded by Council Member Yaroslavsky and that motion passed on a vote of 13 to 2 with only Council Members Rodriguez and de Leon having the fortitude to vote NO. The Council then voted in favor of LASAN moving forward with the rate increases by a vote of 11 to 4 with only Rodriguez, de Leon, Hutt and Padilla voting NO.
So, the motion passed to increase sewer rates by 22% starting on October 1st and to implement 6 additional increases over the next 3 year resulting in more than doubling the current rates by 2028 and it will be forced down the ratepayers’ throats during the upcoming “public hearings” by LASAN. Rodriguez’s motion to do a validation of the rates will go back to the Energy and Environment Committee and, as such, has all but been “killed” unless Chair Yaroslavsky believes she too will suffer the fate of Maria Antoinette with her “let them eat cake” attitude regarding “not insignificant” rate increases. After all, her constituents live in Bel Air, Century City, West Los Angeles and Fairfax, so why should she care about the common folks that live in other districts being able to afford these huge rate increases? But what about President Krekorian representing Council District 2, which includes Sun Valley, North Hollywood and Van Nuys – well he is in the final year of his final term. But what about Council Member Blumenfield representing Council District 3, which includes Canoga Park and Reseda – maybe he just forgot?
This article is for informational purposes only. If you have any questions regarding your property or specific tenancies and the requirements of any local law changes described herein, please consult with an attorney.