General Manager, Burbank Water and Power
Burbank, CA (May 12, 2022) – In the midst of a severe drought, water in California is truly liquid gold. Residents and businesses expect our city to provide safe and reliable water at the touch of a faucet, and for more than 100 years, Burbank Water and Power (BWP) has been doing just that. Our water quality is exceptional, with 99.999% water availability. This doesn’t just happen; significant work and investment behind the scenes ensures we meet our residents’ and businesses‘ expectations. BWP will have to raise our rates in the upcoming fiscal year to ensure that our water infrastructure is in place to safeguard our reliability now and for future generations. Two main factors affect how much we need to increase rates. One is the price we pay for water; the second is the cost of replacing our deteriorating infrastructure.
Since Burbank has no water rights, we must import all our water, purchasing treated and untreated water from Metropolitan Water District (MWD). Treated water flows through our city-owned system directly to your homes and businesses. Untreated water, which is less expensive, is purchased and “spread” onto the ground, where it seeps into the aquifer. The water is stored there like a bank account, and when we need it, we pump it out of the ground and treat it before delivery. This stored water accounts for 75% of the water BWP delivers to our customers. Like most consumer items, the cost of water increases regularly. This year and next, MWD will raise the wholesale price of water it sells to Burbank by 5% each year.
Another significant cost consideration is deteriorating infrastructure. There are 278 miles of underground pipe in Burbank’s water distribution system; that is about the distance from Burbank to Las Vegas – it is a lot of line within our 17 square miles. The piping is reaching the end of its useful life and must be replaced. Additionally, our water-storage reservoirs are getting old. Reservoir Two leaks above the centerline, which means it can only be filled halfway and makes it impossible to store as much water as we used to.
These two contributors to escalating costs make it necessary for BWP to increase our prices if we want to continue to provide reliable water services to our residents and businesses. As a result, BWP is proposing a 9% increase in water rates for the 2022-23 fiscal year. This means that a single-family home would pay an average of $4.24 to $6.45 more per month on their water bill, depending on the amount used. The city of Burbank and BWP understand that this proposed increase will be difficult for some community members. It is never our desire to charge more; however, to ensure we meet the expectations of our community to provide clean, reliable water, we must raise the rates.
Rising Wholesale Metropolitan Water Department (MWD) Costs
Metropolitan Water Department MWD’s capital needs and operations and maintenance spending continue to rise as they work to develop new local supplies and maintain the reliability of their system. BWP has not entirely passed along MWD’s rate increases to our customers because we were sensitive to the impacts of the pandemic and committed to finding a way to balance supporting our community and providing reliable water. In fiscal year 2020-21 BWP did not increase water rates. MWD’s rates increased by 3% per year during that same time.
In fact, for the last six years, BWP has not collected enough revenue to cover our costs, and our revenue shortfall has tripled since 2016. In 2016 BWP was short $1.1 million; this year, we will be short $3.8 million. Even with a 9% rate increase in FY 2022-23, we will still not collect enough to cover our costs. That would require a 20% rate increase, which we are unwilling to implement. But, if we do not increase rates by some amount and address our revenue shortfall, we will fall below recommended reserve funds next year, which would increase our cost of future borrowing.
Burbank was incorporated in 1911, and during the next thirty years, cast-iron pipes were laid in place to establish our water infrastructure. Burbank’s water infrastructure is very old and must be replaced. Today, Burbank has 30 miles of water pipelines more than 100 years old. More than 60% of our water pipe infrastructure is over 80 years old. These pipes are now getting brittle and leaking, creating additional risk for water main breaks and service interruptions.
The 9% rate increase will help BWP increase the pipe replacement rate, complete needed maintenance on our aging assets, and replace a local reservoir made of wood that is no longer compliant with today’s seismic regulations and American Water Works codes. The responsible thing to do is fix these issues before they become unusable and result in even more expensive fixes. This is not an investment we can afford to defer.
What have we been doing to control costs and bring in new revenue?
- Staff is using new satellite and acoustic technologies to determine the risk of failure for our pipelines to proactively and appropriately target dollars where they are needed most.
- The cost to treat our groundwater is paid by Lockheed Corporation and represents $7 million that Burbank customers do not have to pay. Upgrades that will extend the life of our treatment plant and make it more resistant to earthquakes are also paid for by Lockheed Corporation.
BWP Water Division is requesting one new position, a Utility Project Manager, who will deliver technology-driven projects to assess the condition of our infrastructure and help prevent unplanned infrastructure repair and replacement.
- Staff actively looks for opportunities to offset costs for our community. In the last year, $400,000 in cost savings was found by improving processes and using alternative methods to prolong our infrastructure’s useful life, for example, lining instead of replacing a pipe.
- Grant money that will help improve our water infrastructure is always top of mind for BWP. We recently received a $175,000 grant to develop a Drought Contingency Plan from the United States Bureau of Reclamation (BOR), a $50,000 grant to test multi-family dwelling usage, and we continue to apply for more.
Knowing that our community was strained by Covid last year, the City Council elected to use reserve funding to make up the difference. This is unsustainable. Reserve funding needs to be in place to assist with sudden and catastrophic disasters such as earthquakes, fires, or floods.
A rate increase is never desirable, but the time has come for our generation to invest in the water infrastructure for today to provide for the future, similar to what our forefathers did 100 years ago. And, as a city, we have a duty to ensure that we provide excellent services while continuing to be fiscally responsible.
To help those who cannot afford to pay their bill, BWP has financial assistance available and will be launching a new program in July with expanded income requirements to assist even more families and individuals struggling with the cost of living in Burbank.
Burbank residents and businesses are encouraged to attend the Public Hearing for the proposed rate increases on May 17, 2022, by: