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Riverside leaders debate raising water, electricity rates

Nearly two dozen Riverside residents spoke for and against a plan to raise electric and water rates on Tuesday, May 22, as city leaders prepared to vote on whether to charge more starting July 1.
Riverside City Council members hadn’t voted as of 9 p.m.
They  voted 5-2  in January to give “conceptual approval” to the same increases, which will cost the average customer about $3.10 more per month for electricity and $3.50 more per month for water in the first year.
Ana Miramontes, president of the La Sierra Business Council, told the council it was important to pass the increases.
“We live in a beautiful historical city and with that comes the responsibility to take care of the infrastructure,” she said.
The 2.95 percent increase in electric rates and 4.5 percent increase in water rates would go into effect July 1. Further increases are planned for the next five years — averaging 3.0 percent per year for electricity and 5.7 percent annually for water — but will be reviewed by council members each year.
At the end of five years, rates for water and electric will still be lower than competitors such as Southern California Edison and Western Municipal Water District, said Todd Jorgenson, the utilities’ interim general manager.
Pointing to a cast-iron pipe with half the metal gone, Jorgenson said the rise in rates is necessary to prevent pipes put in shortly after World War II from bursting. The city has about 120 miles of cast-iron pipes that are expected to break in the next 20 to 25 years, he said.
Revenue from the increase is essential to pay for infrastructure, renewable energy and utility operation costs, as well as to maintain strong bond ratings and low debt costs, he said.
The increases are expected to bring in an average of $35 million more for each of the next five years.
In response to concerns about affordability, the utilities also expanded the eligibility for its program to help low-income residents. The program will now be available to anyone who makes up to double the federal poverty guidelines — up to $50,200 for a family of four — and includes utility payment assistance of up to $345 per 12-month period.
At least 20 members of the public submitted cards indicating they wanted to speak on the proposal, Mayor Rusty Bailey said. Roughly half urged a vote for it and half urged a vote against it. Many of those supporting the plan were members of the city’s utility commission, Greater Riverside Chambers of Commerce or other civic groups.
Before those comments began, Councilman Steve Adams said the utilities’ financial problems began when the state required less use because of the state drought.
“The city of Riverside was not in a drought,” Adams said. “It was a farce.”
Adams asked that the rate increases be delayed until ewly appointed City Manager Al Zelinka “has his legs under him,” a new general manager for the utilities is in place and an independent audit is conducted on the utilities.
Councilman Chuck Conder — who along with Adams voted against the rate increase in January — seconded Adams’ motion. Bailey said no vote should occur until after the public spoke.
Critics said the increases were unaffordable. They also pointed to the practice of transferring 11.5 percent of utility revenue directly to the city for general services such as police, fire, parks and libraries, which is the maximum allowed by the city charter.
The portion of each payment that’s going to the general fund will now be noted on each month’s bill.
The city’s $411 million reserve also led to skepticism that increases were necessary.
“How did RPU accumulate such a large reserve if they were not overcharging us for the last seven years?” resident Mary Humboldt asked.
Of that reserve, all but about $189 million is dedicated to specific projects or legally restricted, and about one-third of that will be spent over the next five years, Jorgenson said. The reserve policy is consistent with similarly rated utilities, he said.

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