To kickstart this morning's WCF discussion, we'll put the focus on last night's Ogden City Council Work Session, where issues relating to Ogden City's water system were broadly reviewed. Briefly, we've excised the following segment from last night's council packet, which describes the range of last night's council discussion. Not only did the Council discuss the currently pending water rates study, but it examined the City's water system projected infrastructure needs well into the future:
DISCUSSION REGARDING THE STATUS OF THE 2012 UTILITY RATES STUDYUpon our earlier examination in advance of last night's meeting, we'd expected this meeting to be something of a "snoozer." Unfortunately this was not the case at all, as we learned last night in one of our lower comments sections, wherein one alert WCF Reader (who else but Dan Schroeder?) who'd sat in on last night's meeting, provided this sobering heads up:
PURPOSE OF WORK SESSION:____________________________________________
- To review status of the Utility Rates Study
- To review the financial obligations of maintaining a quality water utility system
BackgroundThe purpose of the work session is to provide a status update regarding the Utility Rates Study and to begin the discussion of what will be required financially to maintain a quality water utility system as the City moves forward. The discussion will include reviewing financial implications of the major capital projects identified in the Capital Improvements Plan and the City’s master plans, to review the financial conditions necessary for potential future bonding and to maintain the highest bond rating, and to review requirements for operation and maintenance of the utility system.
Laura Lewis and Cody Deeter from Lewis, Young, Robertson and Burningham will be leading the discussion and will be presenting the information to the Council. Ms. Lewis and Mr. Deeter will be presenting several financial scenarios to allow the Council to better understand the financial obligations the City may have and to review the potential options for funding a quality water utility system. The focus of the discussion will not be on changes to the rates structure but rather on the financial obligations of maintaining the level of service the Council feels is appropriate. Discussion on specific rates and how the costs may be shared among users will be the focus of future meetings beginning with the March 6, 2012 fact finding work session.[Emphasis added].
Breaking news: Water consultants are telling city council to issue additional bonds for capital improvements and repay the debt with significant rate increases in coming years. The scenario that's being shown now would involve $20 million in new bonds and a 60% rate increase over the next 10 years. Keep in mind that Ogden's water rates are already higher than those of virtually all other northern Utah cities.Gentle reader Dan is right, of course. As we reported on WCF last week, Ogden's water rates are already higher than those of virtually all other northern Utah cities.
...Slight correction: Looks like the eventual rate increase would be only 55%.
Hoping that the Standard-Examiner would flesh out a few more facts on this topic, we checked out this morning's S-E article, which was unfortunately no help at all on this new water rates issue:
Alas, S-E reporter Mitch Shaw missed this issue entirely, possibly because he ducked out on the council work session before the water rates discussion came up.
As a consequence, we've done a little additional fact gathering this morning, and here's some additional info, obtained through reliable sources close to city hall, although the underlying facts still remain a trifle thin:
The $20M new bonding for water system improvements, repaid by increasing rates about 55% over the next 10 years, would consist of improvements which would be mostly for the water treatment plant and flow/pressure upgrades.
That's right, folks, despite the last wave of water system bonding, ($49.1 million, to be exact, which occurred only in 2008), our local bureaucrats already seem to be getting in gear to pile on more public debt, with a new scheme to hit the rate payers with higher and higher fees.
We dunno, folks. Wouldn't it make more sense to start tapping the Business Depot Ogden Cash Cow to fund these incessant infrastructure improvements? Wasn't it the original intent of Glen Mechem's mayoral administration in obtaining the BDO federal "land grant" to use the revenues derived therefrom to fund Ogden City's infrastructure needs?
Under Boss Godfrey's administration we got into the bad habit of allowing Godfrey's "A" Team to use BDO revenue to fund every half-baked Boss Godfrey plan, scam or money-losing project under the sun.
It's time for the Caldwell Administration to do an abrupt about-face, no?
If further water infrastructure needs remain unaddressed, they should be funded from BDO revenues, wethinks.
One thing's definitely sure... we'll be turning our attention to council developments for the upcoming "March 6, 2012 meeting", where the council will further "discuss and review the implications of the financial approach determined on February 21, 2012 on the base rate and tiered structure."
Update 2/23/12 8:00 a.m.: One of readers has transmitted to us the following spreadsheet and graphs, showing what the consultants proposed to the council on Tuesday night:
- Water Utility Fund - Comprehensive Financial Sustainability Plan Spreadsheet
- Water Utility Fund - Comprehensive Financial Sustainability Plan Graphs
- $13.13 million for the water treatment plant
- $1.05 million for storage projects
- $12.26 million for distribution fire flow and pressure projects
- $2.5 million for pipe replacement
- $9 million for canyon pipeline rehab project
- $3.03 million for meter replacement
