Opinion Piece by Samuel Strait – March 4, 2016 –
Before the City Council gets all giddy with relief at the failure of the Sewer Rate Protest to garner enough signatures in recent days and makes the mistake of miss reading of the level of angst over the impending vote to go ahead with the new rate structure, it is perhaps wise for the City Council to pause and collectively review what they intend to accomplish and what it is they are trying to achieve with respect to how it will affect the ratepayers. To simply put in place the rate structure changes before the members of the City Council on Monday for an up or down vote will only serve to continue controversy and leave the ratepayers without any real say in this issue that is so desperately necessary.
If the City Council could come up with some sort of reasonable and honest explanation for how it is that the rate payers ended up on the wrong end of what is clearly an on going financial nightmare, only then perhaps can a solution be found. Once that explanation is presented and several options for a possible solution are presented for a vote taken by all of the rate payers, and not just the City Council, only then will the on going controversy subside. As it is, the consumption based rate may seem like a much fairer option to what is so obviously going to be an across the board rise in sewer bills over a four year period. There are clearly problems with such a change that I suspect that the City Council has not considered.
One of the most obvious problems with this effort to pay the $43.8 million loan is a much too small base of rate payers. It has recently been pointed out that this number has shrunk by over 300 since the new sewer plant was opened. How is the effort to repay that loan going to be effected if the current rate paying public continues to shrink? Will commercial businesses continue to flee the city as well as renters when they discover that the can save a substantial amount of money by relocating outside of the City’s water and sewer district? Crescent City already has a relatively large vacancy rate amongst commercial buildings and it has become difficult for the city’s landlords to compete with similar properties in the County solely due to the fact that water and sewer rates have climbed and are expected to continue to rise.
Another more immediate problem will occur when ratepayers simply use less water in an effort to reduce their bill. How will that effect the ability of the City to pay the loan off? The cost of water and sewer are not the only bills that rate payers are faced with and they are not the only place providers have sought and received rate increases. Electricity, Solid Waste, the school district’s bonds, the fairgrounds, property taxes to name a few of the many increases that the local population must fit into already over stretched budgets.
If the City Council continues along the path that has been their want to do so, it can only mean that the legacy of a massively expensive upgraded and expanded Sewer Plant is more important than the welfare of the citizens who dwell in Crescent City. While it should have been crystal clear some time ago that things didn’t exactly go as planned with regard to replacing the Waste Water plant, there are a few basic economic lessons that seemed to have been overlooked when the City borrowed $43.8 million for a new Sewer Plant when there had been nearly zero new development since the completion of the prison, only largely artificial gains in the City’s population during that time, a decline in the rate payer base, a County wide economy that has largely evaporated, and nearly zero growth in population. These dynamics in the County were all well underway long before the sewer plant was even built. It is imperative that the City Council look beyond those staff recommendations for a resolution to the City’s current financial woes and start thinking about the welfare of its citizenry. It is unlikely that any plan for repayment of the $43.8 million loan is going to be successful in the current climate of no growth. Hence it would seem obvious that a more economically friendly city, with a pro growth stand could be a solution to broadening the rate payers base and successfully meeting the city’s obligation. I am quite sure that if the City would be more forthcoming there are no doubt other potential sources of revenue could be found from the current plant’s operations which might bridge the gap between now and when growth actually occurs.
If the current City Council cannot adjust their thinking and become more wholly representative by not moving forward until that ratepayer vote is concluded, then this current change in financing the Sewer Plant will follow in the path of all the other dysfunctional plans for how to pay for that which we could not afford in the first place!