BY DONNA WESTFALL

After listening to our city council approve the latest $5.38/month sewer rate hike and employment agreements, I just shake my head and wonder if they realize what they’re doing. They think that by raising another $300,000, they’ll cut their $650,000 deficit on the sewer plant by almost half and all will be fine with the world.  They think by raising cost of living (COLA’s) 5% and making employees contribute to their own pensions, all will be fine with the world.

What they neglect to remember is that the majority of our folks living here can’t afford to continue to support the black hole better known as the sewer plant or WWTP, continue to support the increase in COLA’s while diminishing government contributions to pension.  This latest increase in sewer rates/employment agreements is not the end or the solution to their money woes.  They will have to continue raising the sewer rates for who knows how long because it was ill conceived and over priced right from the get go.

VIOLATION OF PROP 218

When we think of Prop 218, most remember that it was to protest the increase in sewer rates back in 2007.  Another equally important tenet of Prop 218 is that connection/hook-ups fees are to pay for expansion. Right now our connection/hook-up fee is just under $10,000 per which comes from development/developers.

Except our ratepayers are responsible for paying back 100% of the  $43.8 million loan.  What happened to the connection/hook-up fees and how are they being spent?  That’s why I’m making such a big deal about expansion and the expansion percentage.  It appears to me that ratepayers are paying for expansion.  The big question:  How much expansion actually took place? Until I get some honest answers, I intend to send in my sewer bill/payment UNDER PROTEST.

OTHER CITIES GOING BANKRUPT

The city of Desert Hot Springs lost a law suit in 2001, and that city of 20,000 declared bankruptcy.  The city of Vallejo’s  (north side of San Francisco, population 117,000) problem was city personnel costs.  Police and fire unions kept upping demands and the city council gave in.  Houses were overpriced and when the mortgage scandal hit, prices fell like a rocket. In 2008, they filed for bankruptcy protection. This is what happens in a recession and it is happening here.  When property taxes diminish, the city’s budget goes down.  Also Vallejo is a city that borrowed too much money.  Sound familiar?  $43.8 million borrowed to upgrade/expand the WWTP for our sewer plant on the ocean?

Locally, with the loss of jobs, businesses closing, homelessness, inflation and foreclosures, our sales tax revenues are also dropping.  I spent 3 minutes during public comment at the March 18th council meeting reminding them of these realities.   While our city councils of the past made unwise choices and spent money like there was never going to be a recession, it can’t continue to operate this way for much longer.  If our city council members think that people will remain in a town that doesn’t listen to their concerns, they will be in for a rude awakening.  People will continue to move out and decrease our population base.

July, 2012, San Bernardino joined the California communities of Stockton and Mammoth Lakes in bankruptcy court.  Mammoth Lakes, population 8,000, had a $43 million legal judgement against it.  Stockton failed to get concessions from creditor’s after months of talks.  They are the largest city so far to declare bankruptcy with 330,000 population.  San Bernardino, 210,000 population, with their high unemployment and deficient cash to meet their obligations doesn’t sound too far different from what we are experiencing in Crescent City.

Should Crescent City file bankruptcy?  Probably not yet.  But, they should be looking into it now.

On the upside, when in bankruptcy, the city doesn’t have to pay its creditors while it negotiates a plan for dealing with its debts. Had the City listened to me during court proceedings in July 2010 and taken action then to decrease or change the pensions, stop COLA’s and step-ups in salaries, we would be in a better, stronger position financially right now. But they waited 2 years to get to that point.  They still approved 5% COLA’s at Monday’s March 18th council meeting and to hear Councilwoman Schellong justify it, well, just go to the city’s web site and listen to her.  County resident, John Stetson, brought up these same issues.

ARE THERE ANY SOLUTIONS ?

Back to July 2010, while on the witness stand in Judge Morrison’s court (he’s no longer allowed to Judge) I advised our city to look into having private companies manage our WWTP since other communities were doing it more economically than the city could.  The city water departments still took charge of billing, but all other related services on the WWTP were handled by a private company.  Could the city entertain using pension funds to pay current salaries?  After years of offering more benefits than the private sector, this can’t continue much longer.  Many communities are substantially decreasing health benefits, cutting down on sick days and vacation.

 

 

 

 

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