|Really? You'll fix the pipes this time?|
I for one have never doubted that Sierra Madre's water enterprise needs more cash to survive. Having been literally run into the ground by incompetent management over the years, along with being saddled with immense amounts of bond debt by elected officials who really could benefit from having their heads examined, the money is obviously needed. And where else can they get it except from us?
My objection is that we have not been told what the actual reasons for this rate increase are. And by that I mean who exactly put us into the woeful condition that has made asking for more money necessary, what their motives were, and how exactly they managed to screw up a $6 million dollar water bond deal so badly that it ended up turning into $15 million dollars in hard debt. Which is the actual reason why our water enterprise is in the terrible financial condition it is today.
I stated from the very beginning of this process that if the City actually told the truth this time I would have no burning objections to this rate increase. Of course, City Hall chose instead to feed us a lot of nonsense. They usually do. Veracity aversion apparently being a chronic psychological malady plaguing at least a few of those working there.
The one solution bad government can alway rely upon to save its bacon is initiating additional cash confiscations from the public. And this year with the 61% water rate increase, along with an attempt to extend some of the highest UUT rates in the State of California out through 2022, we are currently being set up for a very expensive double-dip by one of the worst City Councils in Sierra Madre's history.
And, shame on us, they might actually pull it off. Besides, in the end bad government is the responsibility of those who vote it into office. And with a few notable exceptions, we the people have somehow kept electing ourselves a steady diet of lulus.
There was a quaintly deceptive article in yesterday's Pasadena Star News regarding our pending 61% water rate increase. I personally do not know the reporter responsible for this mess, but I thought that perhaps I should share with him the following pointed observation.
If all you are going to do is talk to Sierra Madre's city employees when writing an article about this town, and then take everything they say to you at complete face value, and with no attempt whatsoever at corroboration or fact checking, then you are no longer a news reporter. You are instead their publicist. And while both occupations do involve typing, they are two very different things.
Here is the Pasadena Star News publicity piece I am referring to.
Sierra Madre water rate increases hinge on resident approval (link): The city has approved a five-year water revenue rate plan to alleviate the city’s deficit, but it’s up to the water customers whether it goes any further.
“In order to reverse a deficit position in the water fund, total water revenues need to increase by 61 percent over a five-year period,” City Manager Elaine Aguilar said. “With individual rates, it differs based on a customer’s water use. Not everyone will see 61 percent. Almost 52 percent of customers will see 10 percent in water rates with the first rate increase.”
Per Proposition 218, residents can protest the rate hike by either returning a ballot that was mailed to them or simply submitting a written statement voicing their disapproval.
Ballots are due Jan. 28, and will be opened publicly at a City Council meeting that night. It won’t be known exactly how many residents have protested the rate hike until then, but Public Works Director Bruce Inman said the city has received at least a couple of protest ballots.
If approved, rate hikes will go into effect on July 1. If the city receives enough dissenting ballots, the planned rate increases will go back to the drawing board.
“It’s not the ideal situation, but we want to keep the water flowing and meet the community’s needs, so we don’t have any other option at this point,” Inman said.
The rates were approved by the City Council on Nov. 12. They will cover operation costs such as employee salaries, purchasing reservoirs across the city and day-to-day maintenance, according Inman.
“It needs to be understood that 61 percent is a revenue increase,” he said. “It’s not that everyone is going to pay 61 percent more. It will vary based on water usage, and so on.”
The city’s water utilities department is operating out of their reserve funds as a result of ongoing expenditures to operate the utilities department, users cutting back on their utilities expenditures during the recession, and the city spending more on capital improvement projects than previously anticipated, Aguilar said.
“The city’s water and utilities is operating in the red and has been for a number of years,” she said. “(The revenue increase) will put the city’s water and utilities in good financial ground, and they will no longer have to use reserves to meet current operations.”
A consultant surveyed the city last year to discern what kind of rate increases would level the city’s water funds out of a deficit, and did “a number of different formulas,” city spokeswoman Elisa Cox said.
A couple of things that are not true in this release. Bruce Inman states here that the city has received "at least a couple of protest ballots." The actual number of Prop 218 protest ballots as of today is approaching 800. Or approximately 45% of what would be required to overturn the water rate increase. A number that will only increase as we draw closer to the City's January 28 deadline.
The other problem with this article is actually more troubling because it evokes some of the deceptions used during the Joe Mosca water rate increase "process" of 2010 (link). And that is claiming the reason for taking more water ratepayer money is to fix our water department's woeful infrastructure rather than its preeminent purpose, servicing vast quantities of decaying bond debt.
After all, who doesn't want to fix the pipes? But digging deep to pay off some idiot's $15 million dollars in bad water bond investments? Or telling people that $9 million of it is because some elected buffoons back in 2003 chose to pay only the interest on that debt? And that we will continue to do so for yet another 4 or 5 years? Not quite so appealing.
The crazy thing is, in its official documents City Hall actually does admit that bond debt is a big part of it. Something quite different than what they chose to share with their Star News publicity agent. This from a document currently available on the City of Sierra Madre's website.
Without proper revenue to cover operational expenses, which include the City's bond covenants, the City's Water Fund credit and bond rating could further deteriorate. In September 2011 Moody's investor service downgraded the City's Water Fund Enterprise bond to an A3 rating from an A1 rating. The rationale for the downgrade was the insufficient debt service coverage levels and slow implementation of increased rates.
As I am certain you know, since the above was written Moody's actually did go and dump our water company's bond ratings down to junk. You can read their scathing appraisal of Sierra Madre's disastrous water bond condition by clicking here.
But look, I can talk about this stuff until I am blue in the face. If people are willing to allow themselves to believe fairy tales told to them by city employees who only want more of their money, and for purposes they don't care to talk about in newspaper articles, then there is nothing more that I can do. You either submit your Prop 218 protest ballot, or you accept being treated disrespectfully.
Sure Sierra Madre's water company is in trouble. But I can't see myself wanting to give more money to a group of people who apparently believe they can get what they want by treating the residents of this town like fools.
Even though they might be right.