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More Water Rate Increases are Unnecessary and Amoral

The City of St. Petersburg chose to raise utility rates again at their 9/8 City Council Meeting.  The Residents of St. Petersburg Deserve better than an increase in water rates every year and this trend can be reversed.  The City has increased water rates when use goes down, when use goes up, when investments do well, when investments do poorly.  They always go up because of the bloated bureaucracy that is the city water resources department with employee benefits and pay that almost certainly far outpaces that of people working in the private economy.   All Council members except Wengay Newton approved the budget which increases are as follows: Water 7.5%; Wastewater +2.5%; Reclaimed Water +5%.

An analysis of documents release by the city reveals the following. 

  1. $850,000 in Debt payment for 2012 for a $49 million bond taken through the 2009 Federal Stimulus program (ARRA).  Investigations are under way to determine what exactly that money was used for and what would have happened if the Federal Government had not provided an unexpected “stimulus” windfall.
  2. $950,000 to offset DECREASED WATER USE.  In the Market, when demand goes down cost goes down!!   Only in government does cost go up to offset decreased use of a product!   All to support the bloated government monopoly and bureaucracy.
  3. An additional increase in $1.3 million in debt service also is leading to increased cost.
  4. There was $500,000 in cuts to expense for electricity, wastewater line cleaning and  chemical costs. Does this mean our wastewater lines are not going to be cleaned well?  Were there any cuts in employee salaries or benefits?  Were their salary increases and benefit increases?
  5. Total 2012 budget is about $103 million, a 2.9% increase in the budget.
  6. The Water reserve fund has had $1 million less in interest income.  How can investments b e managed so poorly.  There were clear signs to purchase gold in anticipation of market weakness and several large institutions and countries have moved into Gold to protect their assets.  Tampa Bay Water should have considered this strategy.
  7. Water rates have gone up every year between 2 and 14.5% since 2003.  Wastewater has risen 2- 9.85% every year since 2003 and Reclaimed water up 2-9.5% every year since 2003.
  8. In 2012 (and likely every other year), the city council rubberstamps these increases and never seems to make an effort to provide REAL cuts in costs.  The real cuts would come from worker benefits, administration, and capital improvement that may not be needed (e.g. a desalination plant that is highly controversial and costly).
  9. There are 326 Full Time Employees for the Water department.  One of the highest of all city departments. Analysis is needed on salary and benefits to determine if they are appropriate.  Of those, 194 are unionized. 172 work full time in the storm water department and 90 are unionized. Evaluating these union contracts and their impacts on cost increases as well as their impact on city pension liabilities is nececssary and that is underway here at the Sun Beam Times.

The Water Rate increases are not necessary and the City Council should find serious ways to cut costs that will avoid an increase.  Furthermore, they are amoral at a time when the city residents are suffering high unemployment, underemployment and are the only ones who seem to pay for the never ending price escalations of an out of control government.

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One Reply:

  1. Don Dean

    Thank you Dr Mckalip, for the info, if people would quit living in their own little world, together we could make some changes to benefit this City, Its time to take a look at the people we put in charge to make decisions. I’m sure not many of them are struggling financially to make it everyday, its time we put people in these positions that live like the majority, provided they are educated.

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