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Friday, September 5, 2008

Council hikes water rates

City Council’s Thursday vote to increase water bills for Trenton residents and for customers living in Ewing, Hamilton, Hopewell, and Lawrence demonstrates just how badly the city government of Trenton is functioning.

A plethora of officials from Trenton’s suburban neighbors showed up at last night’s meeting. They first explained how they had been kept in the dark about this latest rate hike and last December’s vote to sell off Trenton Water Works infrastructure in their towns, and then implored City Council members to table the rate ordinance in favor of an in-depth discussion of the increases.

A divided City Council offered apologies to the suburban officials and the general public, and then voted 5 to 2 to pass an ordinance increasing water bills for all water customers by 40 percent.

“We have deliberated on this matter, however, this is the Trenton Water Works,” said Council President Paul Pintella, prior to initiating the roll-call vote that hands cash-strapped residents in Trenton and the suburbs dramatically increased water bills.

Interestingly enough, ordinance sponsor Councilman Milford Bethea actually voted against the measure. Perhaps he had a change of heart after thinking of his constituents, and listening to the passionate pleas of city residents, suburban residents, and suburban officials.

But five members of council – Jim Coston, Annette Lartigue, Gino Melone, Paul Pintella, and Cordelia Staton – voted in support of the measure, ensuring its passage.

Councilman Coston based his affirmative vote on testimony from administration officials who said that federal and state government had mandated the city undertake nearly $100 million in improvements on the water utility, without providing any funding. The work had gone ahead and the debt service needed to support those costs required the water rate hike, wrote Mr. Coston, which necessitated the increase and secured Mr. Coston’s vote.

In a normally functioning municipal government, such a sequence of events is the acceptable method of governing. Administration officials and department employees with knowledge of their departments testify to a body of legislators, which then bases deliberations and an eventual vote on the matter.

The problem with that sequence, as far as Trenton’s municipal government is concerned, is that officials from Mayor Douglas H. Palmer’s administration consistently spin information, bend it, warp it, and spread outright lies concerning municipal matters.

When damaging information becomes the subject of legislative requests, those requests are traditionally met with stonewalling, delaying actions, and other forms of obfuscation befitting of the Richard M. Nixon administration.

With that in mind, voting in support of this water rate increase on the basis of the testimony of administration officials who have long compromised their trustworthiness seems to be a nearly unsupportable action. Support could only have been based upon in-depth research, budget documents, or other nearly things impervious to the spin so frequently here in Trenton.

In this particular matter there seems to be plenty of data, or even simple commonsense, which paints the increase as unnecessary, accept as a move to simply add on to the bottom line of the Trenton Water Works, and the City of Trenton itself.

Over the past few years the water utility has generated millions of dollars in surplus, evident by the nearly $10 million that was transferred from the utility budget into the city’s general fund in a manner that continues to be questioned. A water utility generating such a massive surplus would seem to have little reason to required a water rate increase.

The water increase is needed because of around $100 million worth of mandatory improvements being made to the utility, according to testimony from Thursday’s meeting. But a 40 percent increase will generate somewhere in the neighborhood of an additional $10 to $12 million in revenue – an amount that could support, even with a poor credit rating garnering a 7 percent interest rate, somewhere around $250 to $350 million in bonds.

So the increase and associated revenue spike could likely support much more than the total cost of these improvements. The rate hike supporters have also apparently forgotten about the revenue that is already being generated by the water utility, which is apparently of such a magnitude that it has consistently generated millions of dollars in surplus in recent years.

A 40 percent rate hike is unnecessary, as experts like Mr. Howard Woods and others have pointed out in Board of Public Utilities testimony recently.

All of this information is publicly accessible and easily understood. Despite that, last night City Council members relied on information provided by openly dishonest administration officials, took it on face value, and voted accordingly.

A government like this fails to advance the interests of city residents. Change is needed.


Anonymous said...

I used to receive a water bill of about $100. I paid it within the 30 day window to get a 10% discount. So I had to pay $90. Then the Palmer Administration and City Council stopped allowing the discount. So then I had to pay $100. That's was an 11% increase of me and everyone else you paid their bill on time. Of course for those who didn't pay or didn't pay within the 30 days there was no change. So good customers got and increase and not so good customers didn't. Makes sense (not common) to reward not good and penalize good.
Then there was the 34% increase. Now I had to pay about $134. That about a 49% increase from my $90 payment. Now we get a 40% increase. That means I'll have to pay $188. That will be a 108% increase. Wow!

Anonymous said...

According to Finance Department records, the City has borrowed money from a low interest State Fund. The interest rate for Trenton is about 1.5%. The money is borrowed for 20 years. shows that for each $1 million it would have an annual payment of about $58,000 per year. Therefore, $100 million would have an annual payment of $5.8 million. But the City, Administration and Council, with their 40% rate increase want an additional $13 million dollars based upon the annual revenue of $32 million. This is more than twice what is necessary to pay for the noted capital improvements and would support a total of $216 million of borrowings.

Anonymous said...

The odds of going to court have now increased substantially. Ironically, the Mayor and Council will now be co-defendants and on the same side of the table.

Anonymous said...

As bad as the tax revenue raising water rate increase will be and the previous rate increases have been, there is another significant cost that some water customers have experienced. A recent caller to the water office found that he is now the owner of the underground pipe in the street that carries water from the large, underground pipe to the pipe that carries water from the sidewalk area into his house. As the owner of that pipe, he is now responsible for the cost of repairing or replacing that pipe. After getting little help and information from the willing but uninformed water office employees, he was left to try to determine how this could be so. It was understandably troubling since his neighbor had his pipe replaced by the water utility at no charge in 2003. He found that effective in 2004 the Palmer administration with the approval of City Council transferred ownership of those pipes to customers. This was part of the Ordinance revisions included in the revised Ordinance that set the stage for the attempt to sell the water utility assets in the Townships. What the Ordinance now requires is that the customer must now pay the costs, which are typically between $5,000 to $10,000, for the replacement of a pipe that may be 60 or 70 years old. Although the Ordinance requires the owner to pay for the cost of leaking pipes, contrary to the Ordinance, the water utility is still repairing or replacing leaking pipes at no charge. However, if an old pipe clogs and no water is delivered, the owner must hire someone and pay for the repair or replacement of the pipe. Water utility personnel report that customers routinely break the clogged pipes so that the water utility will fix the pipe at now cost. Water utility personnel report that there are about 20,000 old pipes in the ground. That means that the Palmer Administration and City Council has transferred a significant liability and cost to customers who have to pay a lot more and get a lot less.