03-04-09, Herbert Molano’s Commentary on Utility Rates - "Reasoning - don't leave home without it"

There are some marketing slogans that resonate well after you hear it, such as the one for American Express, “Don’t leave home without it”. I’d like to offer a similar slogan for our city managers and our councilmen, “Credibility – Don’t leave home without it”.

Their credibility got a drubbing last Tuesday during the special city council session and at the evening session. It all started with the strategic report by Glen Steiger, director of Glendale Water and Power, as he defended the high electric utility rates imposed on Glendale residents. As high rates of electricity become a hot campaign topic with a public rally against it scheduled for March 15th, city management is bending over backwards to come up with a public relations gambit to misdirect public opinion.

According to Mr. Steiger the city now has a plan to reduce rates in the coming few years. He acknowledged that Glendale possibly has the second or third highest rates in California, just behind Lodi and San Diego. But to make Glendale residents happier about their high rates, his department has come up with a wonderful feel-good presentation. According to Mr. Steiger, if you take the three main utility payments families pay, electricity, water and waste disposal combined, Glendale families pay a much lower rate than comparable cities. The city manager liked the average comparison so much that he repeated it with much relish afterwards.

In the afternoon special session of the city council, I had corrected the GWP director on that absurd cost comparison. Glendale has 62% of the population in multi-family buildings where residents don't pay for the water; the landlord or the condo association does. Residents who live in apartment units pay a lower rate on trash because the landlord is also paying for the service. Yet despite my exposing the misleading statements by GWP director and the city manager, Councilman Najarian had no compunction in repeating, later in the evening, such blatantly misleading statistics.

So, although thousands of residents are paying for the water and trash in indirect ways that don’t appear on their utility bill, the top city managers are finding extraneous ways to justify Glendale’s exorbitant  rates. According to independent studies by the cities of Roseville and Anaheim, Glendale has one of highest residential electrical utility rates in California, and very possibly has the highest commercial electrical rates in the State.

At the heart of the high utility rates is the increasing yearly transfer of money from GWP to the general fund. This fund is under the financial strain of huge increases in the city’s payroll numbers, high salaries, and pension obligations.

Yet, behind the dais, we could not find a single strong voice for the taxpayer and rate payer. We have no utility rate advocate for the public at the city council or at the GWP commission. Why the reluctance of these men to be advocates for the public?

To find an answer, all you need to do is read a March 3rd article in Forbes magazine, “The Public Mischief of Public Unions”. The recent retirement of Glendale’s Deputy Chief Howard with a pension exceeding $180,000 per year at age 51 is just one example of the horrendous disparity that now exists between the public and private sector employment.

So if you are inclined to vote or watch the city council sessions, I’d recommend a slogan: “Reasoning - Don’t leave home without it”.

Herbert Molano