Pasadena Chamber of Commerce Board Position on Water Increases

On Tuesday afternoon, May 26th, the Board of Directors of the Pasadena Chamber of Commerce considered the cost increases proposed by the Pasadena Water Department to stabilize the department’s financial position.

Rate increases proposed will increase the cost of water  by between 10% and 30% for most customers. While higher usage is charged more, there is no allowance made for conservation. Increases fall more heavily to commercial customers than residential ones, though the majority of water wasted is used in residential irrigation.

The Board;s position:

THE BOARD OF DIRECTORS OF THE PASADENA CHAMBER OF COMMERCE expresses significant reservations about the proposed increases in the cost of water as proposed by the Pasadena Water Department.

The Board is very concerned that water costs for commercial customers will rise by 10% to 30% on July 1, 2009, with additional increases proposed for July 1, 2010.

Concerns expressed very strongly by Chamber members are:

• Increases coming in the midst of a severe economic downturn may have far reaching negative impacts on our members and the local economy.
  • The impact could be cushioned by phasing increases in over multiple years, or
    
  • Lowering the percentage increase
• Pasadena Water Department needs to demonstrate efficiencies and cost reductions before asking for a rate increase.
  • Businesses are reducing operating budgets by 20% or more, Pasadena Water Department is seeking an increase to maintain its budget at present levels. While cuts are being made, they are not in proportion to budget reductions seen in private sector businesses.
• Commercial customers are paying a disproportionate amount of the increases, especially when it is mostly residential customers who are wasting water through irrigation.
  • Larger customers will pay significantly more for water while likely being unable to make substantial savings as they already have implemented applicable conservation measures. These customers are also unable to recoup the additional costs so likely will have to reduce costs in other areas such as workforce reductions.
  • There is no consideration given to those customers who have reduced their water usage by the requested 10%.

• An examination of budget-based water rates has been ordered by the Council and will be considered for implementation next year. The Council should perhaps consider all rate adjustments together, and forego the current proposal in favor of a comprehensive program that adjusts rates to achieve real conservation.

The Chamber Board recommends very strongly that the City Council reconsider the proposal to increase costs of water for commercial and residential customers.

The Board believes that the water cost increases should be phased in over a longer period of time so the economy has time to recover and customers have more chance to absorb the increases without feeling a significant negative impact or having to make cuts of their own to compensate.

The Board also strongly suggests the department be induced to make significant cuts in its own operational budget before seeking increases in revenue.  As an example, the department is proposing to add seven staff positions to enforce the water conservation strictures. The department has said they can do that by reallocating existing staff.  That leads the Chamber Board to conclude that there are currently seven superfluous employees currently on the payroll. While we can appreciate the desire to have enforcement, the Chamber Board is concerned that these “water police” will alienate customers. Those seven employees could likely save the department at least $500,000 in payroll and benefit expenses, if not more. It also seems a much simpler proposition to monitor water usage through billing using existing technology rather than adding enforcement staff.

The Board also requests that rate increases be adjusted so that those customer classes who are wasting water pay their fair share of any increases, and not have the burden of rate increases fall disproportionally on commercial customers, as is clearly the case with the current proposal. Those customers who cannot reduce usage beyond current levels should not have to pay increased costs simply because they use more water in their operations.

The Board also recommends that the City Council direct its representative on the Metropolitan Water District Board to advocate aggressively for cost reductions at the MWD, including reductions that may result from staffing level reductions and contract renegotiations.  Our representative should  principally act as an advocate for the interests of Pasadena and Pasadena Water Department customers, and that includes aggressively seeking reductions in costs of water for Pasadena.

Finally, the Board recommends the City Council look at restructuring all rates and costs all at the same time rather than increase costs incrementally. Water conservation, cost recovery and capital needs should be addressed comprehensively so the complete impact of the entire proposal can be weighed within the context of service levels, commodity costs and conservation efforts.

Pasadena Water Company leadership meets the commercial public

I have to give a lot of credit to Phyllis Currie (PWP Director) Shari Thomas (CFO) and the staff who came out to present their proposal to raise water costs.

With the 800-pound gorilla of our economy lurking in the corner, water company staff explained why they need to raise rates from between 10% and 30% to maintain their financial position. It is credible.  Water costs are going up. The company has been operating at a deficit for years. The water system needs attention.

But, the increases unfairly target commercial customers. Most of Pasadena’s wasters are residential customers, yet commercial customers pay more than their share of the increases.  There are no allowances in the proposal for water conservation.

The BIG question: has the water department reduced costs as much as possible before proposing rate increases?

AND that 800-pound gorilla is still lurking in the corner, threatening citizens, businesses and the city.

Paul

Chamber hosting meeting to discuss increases to water costs

Responding to requests from local businesses, the Chamber, along with the Old Pasadena Management District, Playhouse District Association, South Lake Avenue Business Association and the University Club, is hosting a meeting to discuss the substantial water cost increases proposed by the department. Phyllis Currie, Director of PWP, will discuss and explain the increases, which could be from 10% to 30% higher for some PWP customers. Those attending will have a chance to discuss and share their views.

The University Club hosts the meeting on Friday, May 29th at 2:00 p.m. at 175 North Oakland Avenue.

Come, hear the proposal, express your views, explain the potnetial impact increases may have on you.

Cities, California want TARP money, too

From the New York Times

Localities Want U.S. to Support Muni Bonds

By LESLIE WAYNE

Published: May 25, 2009

State and local governments are asking Washington to give them something that banks are trying to get rid of: federal bailout money.

Doug Mills/The New York Times

Representative Barney Frank, shown, and Bill Lockyer, treasurer of California, both want federal help to back municipal debt.

Robert Galbraith/Reuters

Bill Lockyer, treasurer of California.

California is asking that money from the Treasury’s TARP, the Troubled Asset Relief Program, be used to help back more than $13 billion in short-term borrowings. Members of Congress and several municipalities want bailout money to be used to cover more than $1 billion in losses from investments by municipalities in debt issued by Lehman Brothers, the investment bank that went bust.

And Representative Barney Frank, chairman of the House Financial Services Committee, is drafting legislation that would have the Federal Reserve, and potentially the Treasury’s bailout money as well, stand behind floating-rate municipal bonds — a $400 billion market that provides short-term financing to municipalities, but which has been largely frozen in the current credit crisis.

Personally, I’d like to see California get its finances in order before accepting any money from the Feds.  Continuing to borrow our way out of California’s financial quagmire is not going to bring a long term, permanent solution.

Paul 

Memorial Day, time to remember

For Memorial Day, let’s all take a moment to remember those in our families and in our communities who served and sacrificed for our country.

And let’s take a moment to think about those who are serving and wish them all a safe tour of duty.

Paul

California headed for fiscal disaster if swift action not taken

I had a chance to hear California Controller John Chiang talk about California’s financial situation last Thursday. I didn’t coma away from the meeting reassured that California will be back on it’s financial feet anytime soon.

Here’s the Cliff Notes version of what we were told: California’s legislature and governor must immediately face the emergency and work together to find budget reductions that will bring expenditures in line with revenues.

Right now, California has 60 days before we run out of money to pay all our state’s obligations. If that time passes without action by the legislature and governor,  our state will not be able to pay all its bills. The controller’s office is obligated by the state constituion and by statute to pay certain obligations first, such as bond and debt repayments, so the programs that will not be funded will be those that are not crucial, or are  not required by statute or the constitution. Mr. Chaing said it is likely the state would issue warrants for some payments to maintain certain programs, but that layoffs would have to be made, significant program cuts would ensue and obligated payments would have to be deferred.

The solution rests with our Democratic and Republic state legislators and Governor Schwarzenegger. They have to seriously discuss the problem, find achievable solutions and implement them. That likely means significant program cuts in areas that are dear to Democrats, some revenue enchancements Republicans dislike and reinstatement of vehicle license fees the governor will have no choice but to accept.

The alternative is a state that cannot pay its bills. A state with a bond rating that is so low revenue bonds cannot be issued. A state that cannot support basic services such as public education, colleges and universities, public works and road projects, prisons and public safety and social services.

A state that cannot afford to weather any emergency.

The big question we have to ask is whether our elected officials in Sacramento face the emergency and do something to address our state’s pending financial disaster.

Will Democrats and Republicans in the state house be able to reasonably discuss solutions and alternatives and come up with a workable plan within 60 days?

Our state’s financial health and our future depend on the willingness of our Sacramento representatives reaching a compromise.  It is up to all of us to convince them they must do exactly that.

Paul

No confidence vote for Sacramento

In soundly repudiating all but one of the ballot measures California voters expressed an utter lack of confidence in state elected officials. by overwhelming margins, Propositions 1A, 1B, 1C, 1D and 1E failed. Passage of 1F, that limits legislative elected officials salaries if a budget is not passed on time, clearly rebukes our elected officials for their inability to govern effectively.

So, what will happen now? Already Karen Bass, Assembly speaker has asserted the measures failed because voters didn’t understand them. She’s missing the point that voters understand very clearly that California is not working and voters expect more from our state government than gridlock.

Voters understand perfectly well that our state government is incapable of attending to important business and making the painful compromises necessary to balance the budget and get our state government in order. It’s not just about finances, people are fed up with special interest legislation that cripples our ability to do business, make a living and profit.  People are fed up with back-biting, partisan fighting, inertia and the embarrassing dysfunction that is business as usual in the state house, governor’s office and state offices.

Voters clearly said STOP IT and get down to business. They said that to Democrats and Republicans.  To the governor, every member of the State Senate and the State Assembly.

It remains to be seen if elected officials pay attention enough to heed that message, stop their adolescent bickering and get down to real work.

If the electeds fail to heed the voters’  message will we see initiatives to create a part time legislature? Will we see initiatives to dismantle the state commission system?  Will we see a populist third party emerge to wrest control of the state away from the entrenched powers in Sacramento? Will we see more momentum for a state constitutional convention? Would that even help, given the likely control by the existing leadership in Sacramento?

The voters did not hesitate one bit in telling Sacramento to get down to business.  Will the state government and our elected leadership actually do it?

Paul

Chamber Board adopts legislative positions

At its meeting of April 28th, the Chamber Board of Directors adopted a legislative platform that will serve as a guide for taking positions in the future.

The following was adopted by the Board:

Pasadena Chamber of Commerce Legislative Position

The Pasadena Chamber of Commerce supports a vibrant and prosperous economic environment, safe livable neighborhoods and economic opportunity for everyone in the greater Pasadena area.

COMPETITIVENESS:

The Chamber supports a competitive economic environment for the greater Pasadena area and supports efforts to enhance our competitive advantage. The Chamber recognizes that healthy and vibrant residential neighborhoods are essential to the well-being of Pasadena and we support reasonable protections for residential neighborhoods. The Chamber also recognizes that an equally vibrant business sector is necessary to provide employment, funding for vital public services and opportunity for Pasadena residents. The Chamber supports efforts to make Pasadena more business friendly through competitive taxation and fee structures, streamlined development and economic enhancement opportunities, appropriate and supportive land use policies and fiscal prudence and accountability by the public sector.

THE ENVIRONMENT:
The Chamber supports the City of Pasadena being a leader in the field of environmental stewardship. This includes water and energy conservation efforts as well as smart growth and planning. The Chamber is convinced that environmental stewardship does not have to come at a cost to local businesses or the economic environment in Pasadena. Environmental stewardship should not put Pasadena at a competitive disadvantage.
Environmental legislation, specifically AB 32 and SB 375, encourages development that is less environmentally impactful. The Chamber does not see these measures as restricting growth and development, but as encouraging economic development in ways that promote transit use, creating work spaces close to where people live and allowing people to live, work, shop and recreate in ways that minimize car trips. The Chamber encourages conservation programs that have a meaningful and positive impact on the environment and weigh and balance the economic impacts of such efforts.

WATER:
The Chamber supports initiatives throughout the State of California and the Southwest to provide adequate water to meet our state’s needs, and our needs locally. These can include recycled water projects, conservation efforts and infrastructure improvements that support the ongoing vitality of our state and local communities. We do not believe the costs of such projects and initiatives must be borne solely, or even mostly, by the business community, but should be shared proportionally with residential customers. Similarly, we favor rewarding those who conserve water to the best of their ability, regardless of the amount of water used, while incentivizing water conservation through fair and equitable rate structures across customer classes.

ENERGY:
The Chamber supports reliable, inexpensive and adequate supplies of electricity, natural gas and other services vital to the operation of our local businesses. We support efforts to create and bring more renewable electrical energy to Pasadena as well as conservation efforts. We also believe it is important to encourage construction of transmission facilities that bring renewable electricity to Pasadena.

LAND USE:
The Chamber supports smart growth principles that encourage commercial and residential development near transit centers, as well as creation of employment centers that are easily accessible from places people live. While we support these principles, we do not believe these guidelines need to constrict growth and development. The Chamber supports maintaining our competitive economic environment as envisioned in Pasadena’s General Plan. The Chamber also supports land use regulation that is stable, easy to understand, simple to communicate, and approval processes that are standardized and predictable. The Chamber supports an excellent built environment in the greater Pasadena area. The Chamber, and Pasadena’s diverse business community, should be an active and meaningful participant in Pasadena’s General Plan revision.

TRANSPORTATION:
Effective transportation systems are essential to the prosperity of the Pasadena area. The Chamber supports projects, programs and policies that will lead to a comprehensive public transit system in Los Angeles County and throughout the State of California.  We support an equitable allocation of resources and projects so that every area of Los Angeles County can benefit from improved transit opportunities. We also support completion of the Gold Line Foothill Extension as a key part of a county-wide transportation solution. The Chamber opposes efforts that could restrict easy access to Pasadena’s employers, retailers, restaurants and entertainment venues. We also support making Pasadena’s destinations easy to access for visitors, residents and workers as well as allowing travelers and commuters to quickly pass through Pasadena with minimal impacts on local traffic.

EDUCATION:
The Chamber supports efforts to ensure that every job available in the Pasadena area has a qualified local employee able to fill the position. To that end, the Chamber supports efforts by the Pasadena Unified School District, Pasadena City College and our post-secondary education institutions, both public and private, to improve academic coursework, make curriculum meaningful for students through work experience and exposure to career education, and ensure that every student graduates with meaningful opportunities to pursue higher education and career opportunities. The Chamber supports ongoing educational opportunities that enhance our competitive workforce and ensure that workers can grow and develop.

PUBLIC FUNDING:

The Chamber supports adequate funding for the operations of our local municipal governments, particularly efforts to support our economic environment and the prosperity of our members and local business community. The Chamber supports fiscal responsibility on the part of government at all levels and encourages efforts to reduce governmental costs and the cost to do business in our state and locally.

CONSUMER EDUCATION:
The Chamber supports vigorous consumer and constituent education on all issues related to the environment, resources, land use and the economy. Where possible the Chamber feels agencies responsible for service delivery should make every effort to inform their constituencies, especially the business community, about regulatory changes, fee adjustments, resource allocation and impacts on economic growth and development.

USC students help Chamber look at Pasadena’s future

Once again the Chamber and the City of Pasadena prevailed on students in Tom Olson’s Management Consulting class to examine and propose solutions to concerns in Pasadena. We asked them to look at the retail and office markets in Pasadena and propose some ideas that could help maintain Pasadena’s competitive edge over the next five years.

The results were not what we expected. After an examination of the economy and some sound prognostications about the current recession, they suggested a couple of things that could put Pasadena a the forefront of shoppers and entrepreneurs five years from now.

They proposed Pasadena host an entrepreneur competition in the Rose Bowl for up and coming business people. The two or three-day event would be juried, with competitions in multiple categories and prize money given to the winners to seed their business in Pasadena.  The idea would be to draw entrepreneurs, investors, business people and the public and direct attention to Pasadena as a host for creative thinking in business.

To support out retail environment, the students also suggested Pasadena look at models in places such as London and Hong Kong and consider implementing a payment card that allows users to pay for parking at meters and in garages at a discount. As explained to us, the card works using existing technology and can be expanded for use in retail stores and for other services.

Here’s the USC students’ Powerpoint presentation and a video demonstration of the tap card.

Powerpoint:

pasadena-chamber-of-commerce-final

Smart Card video:

Smart Card video

Many thanks to the student team: Ben, Courtney, Victoria, Michelle, Krikor and Ansel. They put in a lot of hours, did well grounded research and came up with creative suggestions that could benefit Pasadena.

Thanks also to USC Marshall School of Business Dean James Ellis and professor Thomas Olson for their help and support.

It is envigorating to work with students, and they are amazingly helpful.

Paul