Montebello is poised to collect $15.8 million it can spend on a variety of infrastructure improvements as a result of the city’s decision to sell its tiny water system to San Gabriel Valley Water Co.
The city also will keep its water rights, leasing them to the company for nearly $2 million over 10 years.
The state Public Utilities Commission should sign off on the sale of the system, which serves 1,647 properties or 8% of the community. The City Council voted 5-0 Wednesday to make the move.
“This is something that had to be done because of years of poor management and no political will or leadership by previous City Council members or city managers to do something about excessive amounts of deferred maintenance,” Councilman Jack Hadjinian said.
A report in March from Stetson Engineer found that to update the system would require $25.6 million of capital improvements spread over the next 10 years, according to a staff report from City Manager Rene Bobadilla.
The report added if the city elected to keep operating the water system, it would need to increase customer’s monthly fees by a minimum of $142 per month for 10 years, Bobadilla wrote.
The sale comes after a controversial attempt to sell the system in 2015 was quashed by voters.
At the time, opponents of the sale said the city was moving too fast and questioned a bid process that had turned into a bidding war. After the election, others said voters didn’t trust the council to spend the money wisely.
Since 2015, the state Legislature acted to allow three cities, including Montebello, to sell their systems without a vote of the people, which is normally required.
There were no objections Wednesday. Linda Strong, who had opposed the sale four years ago said Friday by phone she’s now OK with it.
“The city did follow a correct bidding process,” Strong said. “It will receive adequate value for the water company. I’m also pleased they retained the water rights.”
The city plans to use the money for multiple improvements, including:
Infrastructure, such as streets, sidewalks sewer, storm drains, parks, and landscaping.
Purchase or replacement of city vehicles.
City Council chamber audio/visual improvements.
Tree planting or reforestation citywide.
Golf course improvements, such as installing a driving range barrier/fence to appropriate height and upgrading the driving range itself to increase use and revenues.