City Manager Scott Ochoa, armed with graphs and pie charts and a thousand details, spent 55 minutes offering a “relatively brief presentation” explaining why electricity rate hikes averaging 26 percent over the next five years are necessary or Glendale’s century-old utility will “effectively be out of business as we have come to know it.”
His efforts silenced skeptics such as the Glendale Chamber of Commerce at Tuesday night’s City Council meeting, kept harsh critics like Herbert Molano from even bothering to attend and convinced the Board of Realtors to get aboard the plan for increases of 8%, 7%, 5%, 2% and 2% each year through 2017 — increases Ochoa insisted would put Glendale Water & Power on a healthy economic footing, improve service, meet rising state and federal standards and lead to only modest future rate hikes.
Here was one of the most important decisions that the City of Glendale, its 200,000 residents, thousands of businesses and its political leadership will make for a long time to come and it was left to the Armenian National Committee and its supporters, along with a handful of other residents, 32 in all, to publicly speak for everyone.
Not that anyone cared very much, with only 189 viewers tuning into the Council meeting online compared to the 2,462 viewers of the July 9 meeting where the Korean “comfort women” statue was being discussed.
Mostly, those who came attacked the plan as too expensive for the poor to afford — three bucks more a month. They argued it’s totally unnecessary — all the city has to do is stop raking $21 million off the top of electricity revenues and transferring it to the city’s General Fund and the utility would be in fine shape.
But as Ochoa put it: “The impact on the General Fund would be crippling,” noting that across-the-board cuts to make up for the lost revenue would mean eliminating 40 cops, 24 firefighters and cutting library, parks and community service programs sharply.
The frustration of ordinary citizens that had surfaced during a series of meetings around town was best put by Annie Jensen, an elderly woman in a wheelchair who rents an apartment near Pacific Park.
“This rate increase is going to affect our lives profoundly,” she said. “It’s going to affect every aspect of our lives…. I don’t have any solutions, but I’m just very uncomfortable with this rate increase…. I would just like you to keep uppermost in your minds the greatest good for the greatest number.”
It was the right point to make.
Glendale Water & Power has gone without an increase in base electricity rates for five years. It has been operating at a loss, has put off critical investments in infrastructure and even reduced rates during the recession.
Efforts to raise rates last year fizzled when the council got cold feet, although it was clear Tuesday that a slim majority was willing to back the front-end-loaded increases this time around.
But Councilman Frank Quintero announced he was “not persuaded” that the utility’s financial situation was as dire as it was portrayed and that the proposal “for me, it just doesn’t work.” Increases of more than 3 or 4 percent would be a hardship for too many people, he said.
Councilman Zareh Sinanyan, the council’s newest member, said he felt like “a gun is being put to my head” to approve the rate hikes when he really wanted to go back to the drawing board and reconsider everything about how the city operates.
This is what makes being a close observer of the machinations of public officials so amusing and infuriating: What they say in public often has little or nothing to do with what the issue is or what they really believe. It’s just politics and they are politicians who play to the crowd, one way or another.
In this case, it was easy to duck the hard question of what is the “greatest good for the greatest number” since it already was clear that Mayor Dave Weaver and council members Ara Najarian and Laura Friedman were ready to approve the rate hikes this week when the critics announced their opposition.
“At this point at the conclusion of the great recession, there are no easy tradeoffs to make,” Ochoa had said, anticipating the questions that would be raised.
“You cut $10 million three years ago, $18 million two years ago, $15 million last year from the General Fund. You’ve reduced your payroll from 1,842 employees 18 months ago down to 1,588 fulltime employees. It has not been at that level since the mid-1990s … we are extremely streamlined and lean, as an organization.”
Glendale Water & Power is in financial trouble after several year of losses, so “if we were to do absolutely nothing … by 2017-18, we would need to do something by way of divestiture or opt into some kind of regional type of joint-powers agreement to provide electrical service to our customers … in any event, we are effectively out of business as we have come to know it.”
It was a dire warning that Quintero dismissed out of hand, saying “I guarantee this utility will not go bankrupt.”
Friedman dismissed his guarantee, noting that even with the 8% increase this year, customers will be paying lower base rates than they did five years ago, thanks to a 10% reduction imposed during the height of the recession.
Even with the proposed increase this year, she noted, Glendale’s total rate hike since 2007 will come to 12.5% compared to Burbank’s 17%, Pasadena’s 31% and Los Angeles’ whopping 52%. For its part, Southern California Edison, the private utility, is seeking approval by the Public Utilities Commission of increases of more than 16% this year.
The reason we’re in this position is the utility has lowered rates at a time when its expenses have gone up,” Friedman said. “Now, we may have to sell the utility if we continue on this track. If we do a 2% or 3% rate increase, we’ll sell this utility in a few years … we will be in a place where this utility is bankrupt. Going slow is what has brought us here.”
If there are alternatives, opponents have until Tuesday night to come up with them — otherwise sharply rising electricity bills are as much a certainty as the lights coming on when you flip the switch.