By Brian CHERNICK

Glendale City Council members successfully adopted the city’s proposed annual budget on Tuesday night, but not without passionate debate regarding water rate increases and the transferring of funds out of Glendale Water & Power into the general fund.

The adopted budget – which was calculated to include a $20 million transfer of funds from GWP – includes an increase in certain water services to be enacted in three years. These increases, in light of the transfer of funds, proved to be a point of contention among councilmembers.

Of the proposed rate hikes, sewer, or wastewater, saw the greatest increase – its first in 19 years – which will nearly double over the next four years. According to staff, the overall rate increase will still be less than if the city had made gradual cost increases over 19 years.

Councilmembers Paula Devine and Vrej Agajanian voted against the $20 million transfer with Devine as the sole dissenting vote on the budget. Agajanian argued that Glendale does not have a balanced budget, but a “borrowed budget,” referencing the annual transfer of funds from utilities into the general fund. Agajanian also cited last year’s Los Angeles Superior Court ruling that stated the city had violated its own charter when it increased electric rates after transferring monies from its electric revenue fund into the general fund. Judge James Chalafant found that the money should have instead been moved from Glendale Water & Power’s surplus, and the city has since followed the procedure laid out by Chalafant.

“I am voting against the transfer because the amount of the transfer is included as a cost of service, which results in a rate increase,” Devine said.

According to Devine, City Manager Yasmin Beers and staff informed her that “if we did not have this rate increase because of the transfer … that there would be little or no impact in our budget,” according to Devine.

“The rates are not being adjusted because of the transfer,” City Attorney Mike Garcia said. “The transfer has been a static cost for a number of years. The rates are being proposed for an increase because the utility costs have increased.”

As it is written, the Glendale City Charter requires a transfer of up to 25% of the utility’s operating revenue to the general reserve fund so long as the utility is fiscally strong.

  Brian CHERNICK