Utilities Commission considering rate increases for water, sewer and gas

Long Beach Utilities ratepayers could pay more for water, sewer and gas service next year as the department began considering its annual budget Thursday morning that includes proposed increases for all three services.

The largest proposed increase is for water service, which could go up as much as 11%, according to a presentation given to Long Beach Utility Commissioners Thursday morning.

Sewer rates are proposed to increase 8% while gas rates could go up an undetermined amount to account for $6 million the department says it needs to raise this year to pay for projects and increased commodity costs.

Commissioners approved a 9% increase last year that officials said would add about $5.13 to the average single-family home’s monthly bill. If approved, the 11% increase would add several more dollars to the average bill.

Department officials say the increase is unavoidable.

“Unfortunately, rate increases are going to be a way of life,” said Brandon Walker, the department’s director of finance.

The commission is scheduled to meet May 16 and again on June 6 before potentially adopting new utility rates. If approved by the City Council, the new rates would go into effect Oct. 1, when the new fiscal year begins.

Walker said that the proposed increases are being driven by a few things like the rising cost of construction and the rising cost of imported water. Walker said that inflation has hit the construction industry hard and the cost of things like concrete and pipes needed for projects have jumped by about 25% over the past three years.

Other things like the increasing costs of labor within the department due to new contracts approved for employee unions in recent years are contributing to the rising costs that will be passed onto customers.

The proposed increases come as Long Beach water consumption continues to trend down with the department supplying a little under 45,000 acre feet of water in 2023 compared to the more than 70 acre feet it supplied in 1997.

“I do agree, rate increases are a way of life,” said Commissioner Gloria Cordero. “But when rate increases are a way of life and conservation is a way of life, the concern I have is that our community is looking at this and saying, ‘We’re saving water, doing what we’re supposed to and now we have to pay more?’”

Cordero asked for the department to host a community meeting to better explain why rates continue to increase despite residents’ conservation efforts.

How the price of gas will be effected through this year’s budget is still undecided. Stefanie Clavery, a finance manager for the gas operations, said that the department is trying to increase revenue by about $6 million and that could be determined by how SoCal Gas, which supplies the city’s natural gas, sets its transmission rates.

Clavery said the department hasn’t figured out exactly how it will account for the $6 million but that will be worked out over the next month before the board potentially votes to approve the budget and send it to the City Council for consideration.

A consolidated campus?

A year and a half after voters approved a charter amendment that merged the city’s water and sewer services with its natural gas department, the Utilities Department is looking at how to bring as many of those employees to work at one location.

The commission’s Infrastructure Committee heard an update Thursday about a proposal that could bring some of the gas operations to the city’s water treatment plant, which is near Long Beach Airport.

Preliminary plans call for a new warehouse, board meeting room and public meeting space to be built on the vacant land surrounding the site, which could include the addition of a parking structure.

The department has properties on Spring Street near the airport where the gas department employees work as well as the department headquarters on Wardlow. The department also bought a floor of a building on First Street and Elm Avenue Downtown for future office space but with years left before that space is usable, it could pivot to leasing the space if it moves forward with construction at the water treatment plant.

Kevin Tougas, acting manager of the gas services bureau, said that the plans are very preliminary and the department doesn’t have a clear picture of what the addition would look like or how much the project would cost.

Tougas said the department could look at bonds, but added that the earliest construction could start is 2026 if the board agrees to move forward with any kind of addition.

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