Palo Alto isn't spiking its water rates just yet, but residents concerned about rising bills should hold their applause for now.
The City Council was scheduled to approve a new water-rate schedule that would raise rates by an average of 12.5 percent. The council held a public hearing on the rate changes last week and Monday night was scheduled to approve the new rates as part of their adoption of the 2012 budget.
But while the council approved most of the budget without a hitch, members put the brakes on the proposed water-rate increase after Councilman Greg Scharff said the proposed rates would violate Proposition 218, which requires water rates to be consistent with the cost of providing service.
The rates proposed by the Utilities Department, with input from the Utilities Advisory Commission and the council's Finance Committee, included new tiers for heaviest water users in both the residential and commercial customer classes, who would be charged more per gallon. But Scharff and the council agreed that the new tiers would conflict with state law and asked staff to come back with a different rate structure.
Palo Alto's Water Fund is facing a $6.2 million budget gap because of the spiking cost of wholesale water. The city's water-supply costs are projected to rise by 37 percent in the next fiscal year and to double by 2016, according to the Utilities Department. The increases are driven largely by a $4.6 billion infrastructure-repair project undertaken by the San Francisco Public Utilities Commission, the city's water supplier.
City passes 2012 budget, seeks union concessions
Palo Alto officials approved the city's 2012 budget Monday night with little discussion, no protests and one glaring asterisk.
The $146 million budget includes $4.3 million in anticipated concessions from the city's public-safety unions — concessions that the city could have a hard time achieving. The city remains in a standoff with its firefighters union over a new contract and the two sides are preparing for arbitration proceedings in the fall. The police union's contract expires at the end of this month.
The uncertainty over labor concessions has cast a shadow over what has otherwise been a relatively breezy budget season. Unlike in the previous two years, when the city cut employee benefits, outsourced services and reduced its workforce by about 10 percent, this year's budget was balanced with few major changes and no service reductions.
The budget includes a restructuring of the city's Public Works Department, a move that consolidates six divisions into three and is anticipated to save about $300,000. It also creates an Office of Emergency Services and an Information Technology Department (information technology was previously under the purview of the Administrative Services Department). It achieves about $1 million in budget cuts from various departments.
But the City Council, which approved the document 8-0 with Nancy Shepherd absent, acknowledged that the difficult part is still to come.
If the city fails to get the concessions from the public-safety unions by this fall, the council will consider other ways to cut costs in these departments, including staffing reductions and fire station brownouts.
Palo Alto Utilities managers form bargaining unit
Palo Alto's utility managers have formed a new employee association that they hope will strengthen their bargaining power in negotiations with city management.
The group, called the Utilities Management Professionals Association of Palo Alto (UMPAPA), includes 45 managers from City of Palo Alto Utilities, said Russ Kamiyama, manager of the city's electric operations. The group's formation was opposed by city management but was enabled by a decision from an arbitrator in April.
Most managers and professionals (with some exceptions in Police and Fire departments) currently don't belong to any labor unions and have their compensation approved by the City Council every year. Kamiyama said the setup made it difficult for managers within particular departments, who believe their work is different from that of other managers', to make their voices heard during negotiations.
Kamiyama said the utilities managers have been trying to form their own bargaining unit since at least 2008. In November 2009, the 45 managers filed a petition with the city. The association's focus is narrower than a typical union's in that it focuses almost exclusively on compensation — not on broader workplace issues such as grievances.