The PUAB meeting was held Feb. 24, a week later than normal, and two days before the City Commission will vote on the same item.
Madrid controls the PUAB agenda, although it is the City Commission’s citizen advisory board, which should have more autonomy from the City Manager’s control. However, the City Commission’s agenda is also determined by Madrid in the board’s current incarnation, which may change after the March 3 election, with three of the five seats to be filled.
Since three members of the PUAB are City employees, the point of the citizen advisory board—eliciting the people’s will on utility issues—is further diluted. The citizens’ views are squelched and narrowed to three minutes, just as they are at City Commission meetings.
Madrid did not relay any public comment from the three town halls to the PUAB, making them likely an empty exercise.
Madrid designed the agenda to block discussion of the $9.4-million water project that was never presented to the PUAB, the City Commission or the public. The project, however, is the reason for the rate hike.
The U.S. Department of Agriculture is loaning $5.4 million and granting $3.9 million for the project. As a condition of the loan, the City must increase its rates.
The agenda narrowed the meeting’s focus to the rate hike, as laid out in the published ordinance.
Two members of the public spoke against the ordinance.
Ron Fenn, who is running for City Commission Seat 5, asked the project be delayed and the ordinance set aside. He called the ordinance’s proposed 56-percent rate hike “onerous.”
He noted $3 million of the project will fix the chlorination system at the Cook Street Station and nearly $6.5 million will only replace 11,000 linear feet of concrete asbestos pipe downtown or 15 percent of the “extreme-risk piping” at $530 a foot. “It needs more study,” Fenn said.
It will cost about $42 million more to fix the rest of the extreme-risk piping, Fenn said.
“Are we going to double the rates for every $10-million loan?” Fenn said. “This rate business is totally wrong . . . We should do a special tax assessment to pay for infrastructure repairs.”
Fenn pointed out “it isn’t equitable” to make the poorest people “living in a single-wide trailer” pay the same amount as downtown business owners to fix the water pipes.
“I also don’t trust the numbers we are using,” Fenn said.
He was referring to the water-rate study done by Karl Pennock, who works for Rural Community Assistance Corporation, which is subcontracted by the USDA to ensure loan conditions are met, such as a rate hike, before disbursing loan money.
A key factor in the study, Fenn said, is the assumption the average person uses 6,000 gallons of water a month. “That is 2.7 to 3 times the national average,” Fenn said. “How many other numbers are wrong?”
Ariel Dougherty also gave public comment. She has attended the three town halls held by the City on the water rate hike.
“There has been a lot of public frustration that commercial rates are not separate from residential rates. I urge you to reconsider the rate structure,” Dougherty said. “Downtown businesses should be paying more. I urge you to vote the ordinance down.”
The PUAB members gave no response to public comment.
In a last-minute change to the agenda, Madrid had Karl Pennock present three options that varied little from the published ordinance’s 56-percent rate hike. All three options would still raise about $1.4 million a year, which will pay the note on the loan, debt reserve, short- and long-term asset replacement.
PUAB Chairman Jeff Dornbush asked Madrid if the board was “expected to make a decision tonight,” with little time to consider the new information. “Yes,” Madrid said.
PUAB Member Ron Pacourek said “We can’t take action on it tonight, because the ordinance is wrong,” since its rate differs from those in Pennock’s three options. Madrid said the ordinance is a draft and can be changed.
Pacourek also refuted Pennock’s numbers. He spoke with the “water department head,” who confirmed the water department never ended a year in deficit. Pennock’s study goes back six years and shows all but one year ended in the red.
Neither Madrid nor Pennock responded to the conflicting information.
The PUAB voted for the middle of Pennock’s three options. The base rate will go from $8.15 a month to $15.50 a month, but it includes 2,000 gallons, unlike the current base rate. The City will charge $2.71 for each 1,000 gallons up to 7,000 gallons, instead of the current $1.75.
The published ordinance, which was not approved by the PUAB, states the base rate would go up to $18 a month and include 2,000 gallons.
The ordinance states the rate increase will occur April 1. It also states water rates will go up another 3-percent July 1, 2021. The PUAB vote did not address subsequent rate increases.