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Sunday, February 27, 2011

Fullerton Water Rates to Double

This Tuesday night the Fullerton City Council will direct staff on the implementation of a water rate study.  Based on the proposal from the City's consultant, Municipal & Financial Services Group (MFSG), the new rates will be increased by 10% for 5 years then 3.5% for another 5 years amounting to a 191% increase by 2021.  The reason for the tax hike is clear.  MSFG says, "However it should be noted that the planned spending on mainline replacement over the projection period is significantly more than the City has undertaken in the past. At a cost of approximately $190 per linear foot of line the City plans to replace approximately 6 miles of mainline per year at a cost of over 6 million per year.  At this pace it would take the City 400 years to replace the entire system (which consists of approximately 420 miles of pipe)."

MFSG's proposal spells out how exactly we got into this mess in the first place.  Unfortunately, this proposal and the implementation should have been undertaken decades ago.  Oddly, the proposal notes that the City could just ignore the problem (like they have been doing for so many years).

"While the capital investments have a pronounced impact on rates the projects are vitally important to ensure the continued operation of the water system.  The City could keep rates low initially by not maintaining the system but would pay a significant price later as system failures spike due to a lack of system maintenance, which would then result in increased costs and ultimately the need for even higher rate increases. Proactively managing of the water system through maintenance and capital investments allows the City to keep rates stable over time."

~Managing through maintenance and capital investment.~
That is a sentence that has been long missing from Fullerton.  The City council has pushed tax bonds to provide low-income housing and park facilities while ignoring the streets, sewers, and water lines.  And now Fullerton taxpayers must pay the high price of municipal mismanagement. Compounding our financial civic woes is that if the proposed rate hikes were approved, the City would have to borrow heavily through bonds to cover the actual costs of replacing the aging system. 

Join me at City Hall this Tuesday at 6:30PM to tell the Fullerton City Council that higher taxes won't fix decades of mismanagement and waste. 

Click HERE to view the proposal.
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2 comments:

  1. Tom SebournMarch 1, 2011 at 10:10 PM

    Too bad the Feds didn't do a works project like Roosevelt did during the last depression.

    That's when Fullerton took advantage of federal dollars to put people to work to build the tunnels that crisscross downtown that provide access to water, sewer and other infrastructure.
    They cemented in Brea Creek and built a dam to stop flooding in the downtown area. Harbor Blvd. never has to be tore up for sewer, water or gas main work because of the access tunnels.

    This country stopped doing big infrastructure projects around the time Ronald Regan became president. That's also when the war on labor began.

    What do you think the city should do now that they are at this point?

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  2. Greg SebournMarch 2, 2011 at 7:41 AM

    Over the next few months the City will be seeking public input. One suggestion raised last night is elimination of the franchise tax. It is essentially a tax within a tax that goes into the general fund and accounts for 10% of the current water rate. Taking that off the table will SAVE water users money over the next ten years instead of nearly doubling the current rate. That would be a cut to the general fund which I don't see as a big problem as compared to the magnitude of this water rate and the infrastructure. I'll have a followup post with more info soon.

    ReplyDelete