July
25, 2016
Former
5th District Councilwoman Gerrie Schipske, today sent a letter of protest to
the Long Beach Water Department Board of Commissioners over their proposed 4%
increases in both water and sewer rates.
The announced increases would be the third in a row by the Water
Department, which is an independent entity overseen by an appointed Board of
Commissioners.
Schipske
based her protest on the fact that the increases are due in part to the City of
Long Beach manipulating a massive transfer of Water Department funds into the
City's General Fund by assessing the Water Department with a "pipeline
assessment fee" on both water and sewer pipes. These fees have been passed
along to the ratepayer.
"This
Budget year," explains Schipske, "the
City of Long Beach is assessing the Water Department $6.16 million for water
pipelines and $4.73 million for sewers. This represents 0.2% of the water
budget and 0.8% of the sewer budget." The assessment was started in 2006
and increased each budget year.
Schipske
contends that these fees violate Proposition 218 which states in part, that
cities cannot assess fees in order to generate revenue. "The fees must
relate to actual costs incurred by the city to allow pipelines and
sewers," says Schipske. "The fees also must be accounted for and
utilized specifically to cover the costs."
Schipske
notes that prior rate increase notices included a breakdown of what was causing
the rate increases, including the pipeline assessment fee. "However, the
current notice of rate increases does not include any explanation of how the
city fees are a part of the rate increases."
In
2012, the City of Fullerton was sued for tacking on a similar fee for its water
ratepayers. The fee was later stopped and revenue returned when an analysis was
done showing that the fees were not related to actual costs as required by
Proposition 218.
Schipske
expressed concern that the Board of Commissioners have not protected
ratepayers: "This is the third year in a row that the Long Beach Water
Department Board of Commissioners has recommended rate increases, while it has
sat silent about the City of Long Beach transferring millions of dollars in
water department revenue into its General Fund."
"The
Long Beach Board of Commissioners has not met its fiduciary duty to its
ratepayers because it has failed to challenge the City's assessment or to
demand an accounting of how the assessment is spent by the City of Long Beach. By not doing so, the
Board of Water Commissioners has subjected its ratepayers to increases for
water and sewer and increases in the 5% utility users tax which is assessed on
the amount of water use billed."
"So thanks to the Board of Commissioners
appointed by the Mayor, the City gets two bites of the revenue stream: pipeline
fees and increased utility taxes at the expense of ratepayers."
Schipske
has requested that the rate increases be stopped until such time that a
complete analysis is done on the fees and the actual costs the fees are being
raised on. She also asked that there be an accounting of where the tens of
millions in funds transferred since 2006 have been spent by the City of Long
Beach and that any funds in excess of actual costs be returned to the
ratepayers.
Written
letters of protest must be submitted by the public hearing date of September 1
at 7:00pm. Letters should be sent to: Long Beach Board of Water Commissioners,
Attn: Board Secretary, 1800 East Wardlow Road, Long Beach, CA 90807. The Public
Hearing is open to the public and will be held at the Long Beach Groundwater
Treatment Plant Assembly Room, 2950 Redondo Avenue, Long Beach, CA 90807.
See attached protest letter
Water Rate Increase Protest Letter by Gerrie Schipske on Scribd
