Panel blasts using Portland water revenue for bikes and streetcars
Here's an interesting document, generated last week by the water standing committee (not the standing water committee) of the Portland Utility Review Board. It complains (as we have recently in connection with sewers) that the city's water bureau is spending customers' quarterly bill payments for stuff that has little or nothing to do with delivering water to those customers. The committee also questions whether the water bureau is using industry best practices to keep costs in line. And it criticizes the way water rates are set, in that there are no checks and balances to insure that water revenues are spent only on essential water-related projects.
Among the highlights of the report:
• The Portland Water Bureau (PWB) is proposing a 12.9% rate increase for FY '11 and a 13.5% rate increase for each subsequent year in the Five Year Financial PlanOf course, no recommendation for change would be complete without plenty of pork for consultants, and this committee wants the city to spend $600,000 hiring outsiders to come in and cover the same ground as in the free report the committee just wrote. But the fact that the utility board is objecting to diverting the obscene water (and sewer) rate increases for bicycles, streetcars, and community college scholarships is pretty telling.• The annual bill for a typical PWB residential customer is expected to more than double by FY 2015...
• Ratepayers have a right to expect that current revenues are being used to fund operations that are competitive with industry best work practices...
Diversion of rate revenue for projects that are unrelated to the delivery of utility services has been a long term concern of the PURB. See the attached 2006 recommendation from the PURB on this topic.
Some recent examples of PWB spending rate revenue for projects that are unrelated to the delivery of utility services:
• $500K+ each year for maintenance of park fountains & downtown bubblers.
• Over $15M in bond funded work for PDOT projects involving MAX and the Streetcar over the last decade.
• Excessive (7.5%) license fee. Now gradually being lowered to 5%. But why is any license fee fair when the revenue is being used for unrelated city spending?
Some recent examples of media reports on proposals from city commissioners to spend rate revenue for projects that are unrelated to the delivery of utility services:
• Using utility rate revenue to fund the Bicycle Master Plan.
• Using utility rate revenue to fund college scholarships for impoverished youth.
Conclusions:
The current system for setting water & sewer budgets and rates has the systemic problem that it lacks effective checks and balances. This situation is made even worse by Portland’s commission form of government where each commissioner directly oversees a portfolio of city bureaus....
In our opinion this is a severe shortcoming when considering the utility bureaus because the commissioners have unlimited authority to raise rates to match spending for those bureaus. After noting that the PURB has unsuccessfully tried to deal with this issue in the past, we are now convinced that the current system cannot ensure that water services are provided to consumers at just and reasonable rates....
For these reasons we are recommending taking steps to move toward a new process, with substantial checks and balances, for establishing budgets and setting rates for PWB and BES.
The brisk sweeping of these recommendations under the large City Hall rug will also make for fascinating viewing, no doubt.
As we've said here before, we need something like a Measure 5 for water and sewer bills. With property taxes strictly capped by law, and pension and other debt about to clamp down on their play money, the Sam-Rand Twins and their City Council colleagues are going to start sucking the life out of water and sewer customers, just as they're doing with parking meters and every other shakedown vehicle they can find.
| Posted at 4:57 AM | Permalink |
|
Comments (23)
Utilities and other state sanctioned monopolies spending ratepayers money for things unrelated to their charter/mission has become a big problem.
While doing that is legal it is unethical. Legislation should be introduced to restrict the use of funds to things related to what they do.
It is also legal for state sanctioned monopolies to contribute to the politicians' campaigns - a clear conflict of interest that should be outlawed.
With Electric Co-operatives not only is there no limit on what the Co-operative can spend the ratepayers' money and none of this is public information either.
Posted by Britt Storkson | February 23, 2010 7:24 AM
Doesn't matter - This same group told PWB a year+ ago that they were wasting money and that 18% (imagine that) was too much to raise water - especially when they had no reason to do so.
PWB response was Randy saying he should have raised rates more and sooner plus "green" houses and solar panels. It's his toy fund now.
Posted by Steve | February 23, 2010 7:38 AM
If the city wants money they should sell the water utility. In many cities water utilities are privately owned and rates regulated by a PUC. Portland could probably get a lot for their utility.
Posted by Robert | February 23, 2010 7:51 AM
Amen to a "measure 5" for water, sewer and other city charges too. Government is restricted on taxes but not on utility rates, fees, etc. Another area where they are making profound changes is moving basic services, like the library from general taxes to a permanent new tax base. Slick!
Over here in Milwaukie the county sewer district is jacking up our rates to pay for new sewers in the 'burbs.
More people with be living on the streets...
Posted by Don | February 23, 2010 8:54 AM
In many cities water utilities are privately owned and rates regulated by a PUC.
Name one. Then tell me about that privately held company's relationship with it's regulator.
Posted by Bean | February 23, 2010 9:05 AM
Name one?
How about a lot, including water utilities for most of New England's population (Aquarion). See also stock symbol WTR.
Waste disposl is a different story, with most sewer systems being municipally-owned. It should be noted that for about 20% of of american homes sewage disposal is purely private matter via septic tank.
Posted by checking in | February 23, 2010 9:39 AM
Water/sewer bill money is going to pay for scholarships for low-income youth? As the parent of a high school senior seeking scholarships, that really caught my eye. Since everybody has a water bill, they are likely taking money from a lot of low-income people (as well as middle- and high-income people) to fund scholarships for a few low-income students. Maybe if they lowered their rates, more people would be able to better afford to pay their own college tuition.
Posted by Michelle | February 23, 2010 9:54 AM
Robert: If the city wants money they should sell the water utility . .
Do some research before you suggest privatization of water. Very bad idea. Bull Run Water System is a gift to this community by many before us who worked hard
to establish this watershed.
We need to hold our elected officials accountable. They should take care first of the bureaus and stop spending our tax dollars on pet projects. We need the basics taken care of. We should not have to turn to privatization to bail them or us out. Privatization would only be a short term fix that this community would likely regret. Stockton,CA worked 6 years to get their water rights back. We must retain our water and water rights for our community.
http://www.foodandwaterwatch.org/water/report/money-down-the-drain/
http://www.foodandwaterwatch.org/water/report/water-privatization-threatens-workers-consumers-and-local-economies-2/
Posted by clinamen | February 23, 2010 11:27 AM
I seem to recall a big survey from a year or two ago where residents supported more city services/maintenance in exchange for higher fees. It wasn't specific about how fees would be assessed, but I think the city would argue they're doing what citizens told them to do.
I treat the PWB bills as a property tax surcharge, albeit one that is assessed more against the number of people living in your household rather then the value of the property.
Posted by bjc | February 23, 2010 11:47 AM
Actually, Michelle, the DO offer lower rates for lower-income folks. It adjusts our bill to what, I think, is more reasonable. However, since they offer it a wide range of low incomes AND it's very easy to obtain, it reveals the water bill for what it is: a progressive tax. If the bill truly reflected the cost of the product and the labor, it would be made harder to obtain relief for what we have actually used.
Posted by Annie | February 23, 2010 12:08 PM
I love and will use all the bike infrastructure improvements proposed in the new bike plan, but I also want to be able to live in my house after I retire, which isn't that many years away. My water bill for last year was around $1,500 (I own and occupy a duplex). If it doubles, it could easily exceed my property taxes.
So if by a Measure 5 kind of solution you mean limiting water and sewer rates to fund only the operations of the water bureau, and nothing else, I'm all for it. If we are going to have new bike trails, the city should put a bond measure on the ballot.
Posted by Gil Johnson | February 23, 2010 1:13 PM
"The annual bill for a typical PWB residential customer is expected to more than double by FY 2015..."
Are you f**king kidding me? If they're are jacking rates like that it should ONLY be because there is a dire shortfall in providing basic services.
If there is such a shortfall, why do they have "extra" money for these other things?
We allow the Council to get away with murder in this city, but these types of rate hikes could actually finally get someone(s) kicked out of office.
Posted by Snards | February 23, 2010 2:05 PM
HAHAH Snards, you're hiLARious... kicked out of office... that's a good one!
Posted by Don Smith | February 23, 2010 4:18 PM
It seems like everything is thrown in the Water Bureau Budget nowadays. It doesn't have to relate. The Rose Festival is now the latest adoptee. They used to have to pay for the lawn to be reseeded but now it's in the Water Bureau budget plus their low cost digs on the waterfront. Sometimes they seem like they're trying to break the bank. Every thing that's added takes away from real maintenance which is now at a $15M backlog plus money for the watershed road maintenance isn't in there.
Not only are the rates doubling by 2015 but the annual DEBT SERVICE is going to triple from $22M to $66M to pay for all the construction to protect us from something we've never had a problem with. By the time you add the other things required, like a cash reserve for the debt, it will probably exceed the expenses, even with ones that don't relate to it. Just like the 'housing bubble' & defaults....this can't be good.
Posted by MoneyQuestioner | February 23, 2010 4:50 PM
Maybe we should make an FIA request for all of the Water Bureau's checks and search for "Breedlove"...
Posted by Jennifer | February 23, 2010 6:18 PM
Portland city government reminds me of the Tweed Ring in 19th century New York City.
A little more finesse, but corrupt to the core (Really, now. A pedophile as mayor?) and able to say to people, as Boss Tweed did, "What are you going to do about it?"
The answer, in Portland at least, is "Not much." It's not just a matter of dumping the current crew, it's who will replace them? I don't see anyone with their hand up. Do you?
Posted by The Other Jimbo | February 23, 2010 6:27 PM
It's really sad that the putzes that run the water Department think so little about the people that pay the bills. Thankfully, we moved to Reno where our combined water and sewer bill is about 40% of what we paid those jerks in Portland. Oh - and when it rains we don't get poo poo going into the Truckee River either.
Posted by Dave A. | February 23, 2010 7:02 PM
Actually, Michelle, the DO offer lower rates for lower-income folks. It adjusts our bill to what, I think, is more reasonable.
Actually, you're only partly right. The water bureau offers a discount on *water* rates (about 50% now) only. The majority of water bills--sewer charges--are not discounted. The largest chunk of water-related charges in Portland are sewer charges.
Posted by ecohuman.com | February 23, 2010 9:06 PM
Legal restrictions sufficient to do the job, if anyone cared to enforce them, already exist. Kroger could ultimately enforce the applicable state laws, if the City Atty wasn't giving the right guidance to the Commissioners, or they chose not to listen to her on it. The PURB was created mostly to put a little sunlight on it, but they are only advisory.
The only way you could really do it is to make them separate units of government, with their own elected boards. That way works well elsewhere but spinning them off here is going to be lots more work than a recall. Not holding my breath.
Posted by dyspeptic | February 23, 2010 9:25 PM
Spinning off the city utilities to a separate entity seemingly could be done by the voters. Eugene and Springfield both have independently elected water utility boards (in Eugene that board also governs the electric system). Given the lack of accountability and solid utility practice by the Portland City Commission, concerned citizens and businesses now paying excessive rates loaded with non-utility expenses should consider such a measure. The City Council pays no attention to PURB.
Posted by sweetbriar | February 23, 2010 10:39 PM
Ecohuman ~
We get about 40% off our total water and sewer bill. I mention this because it seems like you're implying that the discount isn't a big deal. Well let me tell you, paying $90 less was a big deal to me.
Perhaps it's just the principle of the thing to you since the discount technically only comes from the water portion? Well, when you or I "disconnect" and start doing "humanure", we can talk about separate bills; until then, it seems to be a distinction without a difference.
Posted by Annie | February 23, 2010 10:51 PM
The City Charter appears to restrict the use of sewer revenue to just sewer purposes and "investment":
5.04.400 Sewer System Operating Fund. -
(Added by Ordinance No. 160515 effective Mar. 28, 1988.) The Sewer System Operating Fund is hereby made a part of the Code of the City of Portland, Oregon, for the receipt and expenditure of monies associated with operation and maintenance of the sewer system, including sanitary and drainage services. Monies in the Sewer System Operating Fund may be transferred to the Sewer System Debt Redemption Fund, the Sewer System Construction Fund, or the Sewer System Rate Stabilization Fund. Money in the Sewer System Operating fund may be commingled with other City money for investment purposes.
See also 5.04.400, 5.04.410, 5.04.460, 7-107, 11-104 and 11-302 for similar restrictions.
Posted by jumpshot | February 24, 2010 7:40 AM
Apparently they use BES funds to finance Tri-Met:
http://www.portlandonline.com/omf/index.cfm?c=30349&a=281194
Page 2. Makes fascinating reading, Shaft guarantees only a 12% increase this year.
PWB is now a piggy abnk to be raided.
Posted by Steve | February 24, 2010 8:58 PM