HIGHER WATER RATES COMING IN L.A. COUNCIL FAVORS 2.75% INCREASE IN EACH OF NEXT 2 YEARS, PLANS FINAL VOTE NEXT WEEK.

Byline: RICK ORLOV  Staff Writer

After a months-long review by neighborhood councils, the Los Angeles City Council gave preliminary approval Wednesday to raising water rates by 2.75 percent each of the next two years.

In an 11-0 vote, council members noted the increases came after a historic change in the process: getting input from neighborhood councils in the beginning of the process rather than simply forcing the increase on customers.

``We learned a lot in this process, and I think the transparency helped us in the long run,'' said Ron Deaton, general manager of the Department of Water and Power.

The rate increases will return to the council for final approval next week, then go to Mayor Antonio Villaraigosa for his signature.

The new rates will increase the average bimonthly residential bill from $53.50 to $54.30, Deaton said. For properties larger than 17,500 square feet, the average bill will go from $232 to $236.

The DWP will have to demonstrate that it has met performance goals before the second year of the rate hike is allowed to take effect, the council said.

The utility was able to reduce the impact on residential customers by ending its long practice of giving preferential rates to businesses, Deaton said. Under the new system, all customers will pay the same per-gallon rate.

Deaton told the council the increase is 1 percent less than proposed a year ago after officials reviewed the DWP's budget and conducted an independent audit of the agency.

Councilman Greig Smith, who sought the independent audit, said he was pleased with the DWP's progress.

``Last year, we were looking at a 3.8 percent increase, and we have been able to cut it back,'' Smith said. ``And next year, they are going to have to show they have worked in good faith if the rates are going to go up again.''

For the first time, the DWP reached out to neighborhood councils in an effort to avert controversy like that of several years ago, when the groups united and forced the agency to scale back its planned rate hike.

``I think it helped us explain to the neighborhood councils what the money will be used for and why the increases are needed,'' Deaton said.

``No one likes to pay more for a commodity, and we have tried to keep the rates as low as possible.''

The new rates are expected to bring an additional $17.3 million to the DWP to cover rising costs of treating and transporting water and making infrastructure repairs.

``We have an older system, and it costs money to keep it operating,'' Deaton said. ``Our crews are paid well, but they deserve it. They are the ones who go in when a water main breaks or climb the poles to restore power.

``I would put our utility and its costs up against any other systems in the state or the country.''

He also said the city faces continuing liability over a dust-remediation project in the Owens Valley, where most of the city's water supply originates, and has allocated $22 million to handle it.

The city also will need to spend an additional $20 million, he said, to bring in water that is no longer available from the Owens Valley.

rick.orlov(at)dailynews.com

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WATER RATES

The City Council gave preliminary approval Wednesday to a 2.75 percent water-rate hike for each of the next two years. Recent rate hikes include:

2004: 11 percent (first increase since 1993)

2005: None

2006: 2.75 percent

2007: 2.75 percent (proposed)

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WATER RATES (see text)