Water Industry News
San Gabriel Valley Company water rate increases
By SHEL SEGAL
It's one of life's most basic necessities, but many in Fontana feel they are paying too much for it.
That's why hundreds of Fontana residents came out for two meetings -- one at 2 p.m. and one at 7 p.m. -- on Nov. 18 at the Fontana Civic Auditorium to voice their contempt for how much money is coming out of their wallets.
Their discord was directed at the Fontana Water Company, a subsidiary of Rosemead-based San Gabriel Valley Water Company, during a public hearing of the California Public Utilities Commission.
Fontana Mayor Mark Nuaimi did not hide his anger and disgust when addressing the panel, which consisted of water company representatives, CPUC representatives and an administrative law judge, and called the session his personal "therapy" for letting out his anger against the water company.
"I am angry we have to fight an unjust rate increase once again," Nuaimi said. "(The San Gabriel Valley Water Company) is currently collecting a rate that wasn't justified and they've come back for more. You are currently 45 percent higher than others in the region and you want more."
Nuaimi was referring to a city report, which states compared with 11 other local water companies, Fontana residents pay the highest monthly standard rate for water at $36.23, while those in the West Valley Water District pay just $11.87 a month and residents in Colton pay just $12.20 a month.
The report also said Fontana residents pay the most for water usage, at $1.54 per 100 cubic feet, while West Valley Water District customers pay just 80 cents and Rialto residents pay just 87 cents for the same amount of water.
Nuaimi added the water company had a profit of more than $11.6 million the past year, paying out nearly $6 million in dividends to its shareholders.
"I figure you must be losing money, but, no, your profits are increasing," he said.
The San Gabriel Valley Water Company asked for a 77 percent increase and received a 33 percent hike a few years ago by the CPUC, even though the commission said the company failed to meet its burden of proof to justify a rate increase.
The city of Fontana has been fighting the increase ever since, with a recent audit saying not only was an increase not warranted, but there should be a refund to customers of around $28 million.
Since then, the water company has asked for an additional 24 percent increase on top of the original 33 percent to be rolled in during the next three years. The commission is yet to decide on that request.
However, Timothy Ryan of the San Gabriel Valley Water Company defended the rate hikes, saying the company needs to clean up contaminated water and improve its infrastructure.
"Seven of the 10 wells had perchlorate in the wells, meaning they could not be used," said Ryan, referring to a chemical that has been discovered in local water which is also used in making rocket fuel.
"About $1 million of the funds was given by one of the companies -- Goodrich -- to clean it up. We will continue these efforts so consumers will be shielded from these costs."
Ryan said an upgrade needs to be made to one of the company's local facilities, in addition to just the cost of getting water from its two main sources -- Lytle Creek and wells in the Chino basin.
"This is our first increase in a decade," Ryan said. "We understand no one likes to pay more. We're trying to make it where the consumers don't have to bear that cost. We've been working with Congress. We've been working with the city."
Ryan added the company also has a low cost water program that low income residents can apply for.
Ryan's remarks did not sit well with Nuaimi, who said the company does not charge developers a one-time fee -- which is done by all other water companies -- when they build in Fontana. Instead, he said, the cost is passed along to the consumer in perpetuity, making the company more profitable.
"They don't want (to charge developers) because they can't get profits," Nuaimi said. "They get 10 percent for all infrastructure put in the ground. Tell Fontana Water Company: Live within your means or get out of the business."
Marvin Mattes, an attorney for the water company, said the company had a net profit of $89 million between 1990 and 2004, with $51 million going to shareholders.
That is one of the reasons why Nuaimi and the city have been fighting the rate increases, Nuaimi said.
"This is a company that has and continues to have sufficient income," Nuaimi said. "No rate increase is required because sufficient income is available. (The company) has enough capital project money. It doesn't need a rate increase."
City Councilman Frank Scialdone agreed with Nuaimi, and said all he wants for the city is a fair deal.
"We just want to pay a fair rate," he said. "A fair rate is not what the Fontana Water Company is proposing. Look at what other communities are paying."
Scialdone added he understands he doesn't want the water company to lose money, but the increase proposals are outrageous.
"I don't want Fontana Water Company to operate at a loss, but the totality of the circumstances are just flat wrong," he said. "All we ask for is a fair rate. We agree to pay for our product, but we don't need to get raped over it."
Mike Wubker, a 10-year Fontana resident, said the high water bills from Fontana Water Company are affecting his family's way of life.
"Over the last few months we had to stop watering our lawn," he said. "The bill got up to $100. We can't do it anymore. The average income in our area is just $34,000 and a lot more people make less."
Nuaimi said he was thrilled with the participation and attendance by Fontana residents, but added they need to get more involved in order to fight the rate hike proposals.
"I thought the residents provided compelling testimony indicting the business practices of the Fontana Water Company," he said. "I wonder how many meters are never read in this community. Perhaps we need to launch a community initiative to have residents read their own meters, record the usage, and then compare it against the 'assessment' from Fontana Water Company," Nuaimi said.