Another L.A. budget bummer: Residential sewer fees set to double by 2028

Good morning, and welcome to L.A. on the Record — our City Hall newsletter. It’s David Zahniser, receiving an assist from my colleagues Dakota Smith and Rebecca Ellis, as we discuss L.A.’s political scene.

It’s been common knowledge around City Hall that this year’s budget process was going to be something of a bummer.

First up was the proposal to cut more than 2,000 unfilled positions — a reduction triggered, in large part, by expensive new salary agreements with the city workforce. At many agencies, those cuts are being accompanied by year-over-year decreases in funding.

Now there’s another piece of the budget likely to annoy Angelenos: higher fees.

The Fire Department is looking to hike the cost of ambulance services, inspections and other operations. City Planning is also expected to increase fees, according to the budget.

But by far the most significant increase is planned by the Bureau of Sanitation, which is seeking the council’s support for seven sewer fee hikes by mid-2028. (The charge is one of several that appears on the bill sent every two months by the Department of Water and Power.)

The first increase is planned for October. Under the proposal, the bimonthly charge for the typical single-family home would move from $72.27 to $92.08, according to a report issued by the sanitation agency this week. Six more sewer fee hikes would follow, taking the bimonthly charge to $155.55 in July 2028 — more than double what it is now.

The increases are expected to generate nearly $115 million over the coming fiscal year, according to Mayor Karen Bass’ proposed budget for 2024-25. The money is needed, city officials say, to pay for infrastructure repairs, including upgrades to aging sewer pipes.

“Nobody likes to pay fees. I certainly don’t,” said Councilmember Bob Blumenfield, who heads the council’s budget committee. “But at the same time, you need your sewer to work. And if the cost of maintaining it is not paid by a fee ... the system is going to break, and the costs will be much more.”

Bass voiced support for the increases, saying they would keep “Angelenos and our beaches, waterways and ocean safe.” So did Councilmember John Lee, who called the rate plan “vital to the health of the city’s wastewater system.”

Councilmember Monica Rodriguez, also on the budget committee, was skeptical. She said she would not support the increases without “an independent and expert analysis.”

“I have an obligation to ensure working families who are already struggling to make ends meet are not disproportionately burdened,” Rodriguez, who represents the northeast San Fernando Valley, said in a statement. “Fee increases of this amount cannot be rushed for political expediency.”

Sanitation officials say they turned to the engineering, construction and consulting company Black & Veatch to help develop the increases. The last set of sewer fee hikes in L.A. was approved in 2012, with the final increase going into effect in 2020, the agency said in its report.

Appearing Friday before the budget committee, city analysts offered another argument for the increases: satisfying the agencies that assess the reliability of the city’s bond programs.

Two years ago, S&P Global Ratings put the bond rating for the wastewater program on a negative outlook, citing concerns about “environmental, social and governance risks,” City Debt Manager Ha To told the committee. At this point, she said, the rating agency’s primary concern is the lack of “an approved rate plan.”

“The entire investment community is looking at the city to raise its rates,” To said.

The Sanitation Bureau has gone through a turbulent few years. Its Hyperion Water Reclamation Plant experienced a massive sewage spill in 2021, drawing sharp scrutiny — and the threat of financial penalties — from water regulators. The agency was also buffeted by a class action lawsuit alleging that many L.A. residents were overcharged for sewer services, which led to the creation of a $57.5-million settlement fund to pay for customer refunds.

If the fee increases are approved, Hyperion would see “significant and necessary investments,” sanitation officials said.

The increases would affect not just single-family homes but also apartments and businesses. For example, the typical bimonthly sewer fee for residential buildings with four units or less, now $145, would reach $299 in July 2028, according to the city’s report.

Money collected from the fees may be used only for sewer and sewage-related purposes. However, the city’s general fund — which pays for basic services like police and fire response — subsidizes low-income residents who are charged the fee. That means the higher the sewer fee, the larger the contribution from the general fund to aid needy families, budget officials said.

State of play

— RUSHING BACK TO L.A.: Bass began the week in Washington, working with other mayors to promote policy changes aimed at assisting homeless veterans. She cut that trip short, flying home early Wednesday in the wake of violent nighttime attacks on pro-Palestinian protesters at UCLA.

— DELAYED RESPONSE: By Friday, law enforcement agencies had cleared the UCLA encampment, arresting scores of protesters. But big questions remain, including why it took so long for police to intervene. “There need to be consequences, and there need to be changes,” said David Myers, UCLA professor of Jewish history, who called the incident “a total system failure.”

— PUSHBACK IN EAGLE ROCK: Executive Directive 1, the mayor’s strategy for fast-tracking the production of affordable housing, is under fire in Eagle Rock, where a developer is looking to demolish 17 rent-controlled apartments. That developer wants to replace those homes with a 153-unit affordable housing project, using the mayor’s ED1 process for speedier approval. On Tuesday, Councilmember Eunisses Hernandez persuaded her colleagues to seek a temporary ban on such projects in Chinatown and part of Eagle Rock if they would lead to the destruction of five or more rent-controlled units.

— SPEAKING OF RENT CONTROL: Real estate developers have built more than 10,000 units of rent-controlled housing since 2007. But some tenants don’t know they’re living in those units, The Times reports.

— SAFETY SICKOUT: The Metropolitan Transportation Authority warned passengers Friday that buses might experience significant delays, with drivers staging a sickout over worker safety. Bus drivers have voiced increased frustration about violence on the transit system, which has victimized both riders and Metro employees.

— ANOTHER HOMELESS AGENCY? The City Council voted this week to explore the idea of creating a city agency focused exclusively on homelessness. The city already participates in the occasionally derided Los Angeles Homeless Services Authority, which is governed by a city-county board.

— UP IN FLAMES: Los Angeles County firefighters woke to a major fire in their Huntington Park station Wednesday. The cause of the blaze, which destroyed fire trucks and much of the station, is under investigation.

QUICK HITS

• Where is Inside Safe? The mayor’s program to combat homelessness returned to the coastal district represented by Councilmember Traci Park, heading to Pico Boulevard at Centinela Avenue. Inside Safe also went to Hollywood, an area represented by Councilmember Hugo Soto-Martinez, going to the Sunset Boulevard offramp of the 101 Freeway.

• On the docket for next week: The council committee that focuses on environmental issues is expected to meet Friday to discuss the proposed increases to the sewer service fee mentioned at the start of our newsletter!