In California it’s hard to stop writing about water once you start, and after I posted last week’s piece about water rates, more thoughts bubbled to the surface. (Sorry.)
For one, what about the fact that opponents of the rate increase persuaded about a quarter of the city’s property owners to file protests against the rates? Under Prop 218, if a majority of them had protested, the rate increases could not have gone into effect. What if the organizers of the “no” campaign had succeeded?
It’s frightening. The Water Division would have gone into deficit. What might have happened then? It’s like in Washington where people play politics with shutting down government. It’s nihilism.
By any measure, Santa Monica is a well-run municipality. Elected representatives have made responsible choices over the decades, particularly in connection with infrastructure and essential services, like water. Going back more than a century we have had a citizenry with admirable public spirit that has voted time and again to tax itself to pay for what the city (and schools) need. What’s with all this anger and spite? You’re telling me that because traffic is bad Santa Monicans don’t want to pay what it costs to keep their water running?
And no, it’s not about enabling development and yes, Council Member Sue Himmelrich was correct when she said that water was underpriced.
Another thing that I thought more about since last week is whether the City should borrow money, by issuing bonds, to pay for water system capital expenditures. This is a possibility that the City Council left open when it increased rates.
I support municipal borrowing for infrastructure, but debt is not always appropriate. It’s like with any enterprise. Borrowing makes sense when a city needs to make large expenditures, too large to be paid for with current income or accumulated savings, to build assets that will have a long lifespan. Santa Monica voters did the smart thing a century ago when they approved bonds to pay for buying water rights and for the initial building of the system, because they didn’t have the cash.
But that’s not the case now: the system is built and for the most part capital expenditures are needed only to maintain it. It’s not a good idea to borrow money for routine expenditures, and that includes maintenance. The current capital plan, according to a staff report to City Council from last June, is to spend about $3.5 million each year, about 11 percent of the Water Enterprise Fund, to replace aging water mains.
The City has about 250 miles of water mains. Some pipes, made of cast iron, go back to the 1920s. Old cast iron pipes not only might burst, but they also rust inside and that reduces water pressure and flow. Typically it costs $3.5 million to replace 9,000 linear feet of pipe, a little less than 2 miles, with pipes made of more advanced materials, such as ductile iron or polyvinyl chloride (PVC).
This pace may not be fast enough. Water mains may last a century, but replacing less than two miles per year will not recycle a 250-mile system in 100 years. As the pipes from the system’s big expansion in the 1920s hit the century mark, the Water Division may need to pick up the pace. But even so, it’s unlikely that the City will need to spend tens of millions of dollars at any one time. Is it going to make sense to borrow? We’ll have to see, but I doubt it.
Last week the City Council was considering rates for the next five years, and chose not to raise rates in years two through five by the 13 percent that Water Division staff had recommended. I agree with those council members who expressed caution about spending $6 million over five years on new water meters, money that makes up much of the difference between 13 percent and the 9 percent increase that council approved. I suspect, however, that the realities of maintenance will mean that higher rates will be required in the future.
Some opponents of the rate increases who want the city to borrow to pay for capital expenditures say that it’s not fair for them to have to pay for infrastructure that will be used by future generations. I discussed this argument in my last column, but the more I think about it the question raises philosophical issues. I have to ask: what are we doing here, in this city (and in this world), if not to leave it (or both) a better place?
When I moved to Santa Monica more than 30 years ago I received the benefit of all the investments prior generations had made not only in our water system, but also in streets, parks, schools, etc. It’s our turn.
And so what if we leave better public facilities for future generations? In my view, that’s something I’d be proud of, not resentful about.
Thanks for reading.