Item 27: THIS IS WHY I BLOG.
Shane Scott and Saul Gonzales brought this agenda item up. Because of equity/poverty/other buzzwords, Shane Scott wants to reduce your water and wastewater bills. He thinks it’s crazy that it’s so high.
His proposal is to restructure the rate system. He says right now, you get the first 6000 gallons at a low price, and then tiered surcharges kicking in above that. Shane Scott wants you to get the first 8000 gallons at that same low price, and then pro-rated beyond that. THIS DOESN’T SAVE MOST PEOPLE MONEY. If you use 5000 gallons, you’ll get charged exactly the same! All this does is encourage a lot of people to use more water, because it’s free. (Maybe it helps big families, maybe, if they tend to use 6000-8000 gallons? They now get 1-2K gallons of water for free?) Shane Scott also wants to do something vague, similar, you know, for the wastewater rates.
First off, Shane Scott doesn’t even have the pricing structure right. According to the water guy:
Water rates: Base rate: $26.82 minimum.
Then $4.49 per 1000 gallons, up to 6000 gallons.
$7.86 per 1000 gallons after, up to 9000 gallons.
Then it goes to $9/1000 for the next tier, then $10.12/1000, then $11.24/1000, and then $13.48/1000 thereafter.
So you can imagine what Shane might mean – extend the $4.49 rate up to 8000 gallons. That would save a few people $6.42 per month, if they happen to already use exactly 8000 gallons per month. Good job, Shane.
Wastewater rates:
$27.88 per 1000 gallons, up to 2000 gallons.
$8.03 per 1000 gallons, thereafter.
The city uses a consultant to set prices that will cover costs and incentivize conservation. They don’t turn a profit.
Jude Prather makes the point that if you earn $1000, then $100 is a huge portion of your paycheck, whereas if you earn $10,000, it’s a negligible amount. What he’s trying to say is that flat taxes are regressive. This is very true. This is why sales taxes are problematic, but income taxes are better, and capital gains taxes and inheritance taxes are even better.
But water just isn’t a great context for that argument, because we’re talking about water. There’s a specific phrase for this: “tragedy of the commons”. Basically, if you have a pond, and too many people fish out of it, you’ll kill off the fish population and then nobody can use the pond anymore. When you have a natural resource and everyone partakes freely, you can wreck your natural resource really quickly. You have to drive consumption down and monitor what you can sustain.
Water needs to be priced to encourage conservation. Frankly, if I were setting the rates, I’d price the golf courses out of existence. But no one has consulted me on this.
Mayor Hughson says she’s all for lower rates, but how exactly are they going to pay for the water utility system and wastewater processing and the pipes and all the rest of it?
Jude Prather comes in sounding so correct that I thought it was the city water official at first. He says that people with huge water bills are watering their yards and filling up their pools, and that the real concern should be electric, and making sure that no one is going without air conditioning in the summer, when it can turn deadly for vulnerable people.
Mark Gleason also makes a lot of sense! His point is that city-run utilities are enormously complex and we should not make uninformed decisions. He also points out that it’s easy for someone to run up a $400 bill if they have a leak they don’t know about, or some extra family members staying with them, or they fall behind for a few months.
From there, Mayor Hughson and Alyssa Garza take the conversation over to the Lifeline Rate and the Utility Assistance Program, both which are so poorly advertised that those who need it have never heard of it. In fact, city council members – and your friendly marxist bloggers – don’t really know about such things, or how to direct someone to find it. The conversation seems to be coming to its natural conclusion: we need a concerted plan to strengthen the outreach effort for the Lifeline Rate and Utility Assistance Programs.
BUT WAIT. Shane Scott is not comfortable with his super dumb idea being molded into something reasonable! It’s not fair that relief only targets poor people! Rich people also need relief from their high water bills (under his plan which offers no relief, but encourages higher consumption).
He asserts that it is not so complex. Give him ten minutes and he could find all the savings we need. Mayor Hughson asks him why he didn’t come to his own agenda item prepared with a proposal then? He says he didn’t want to ram ideas down anyone’s throat. Dude, cut your losses and backpedal slowly away from this whole mess.
Saul Gonzales at leasts want to see the financial impact of the proposal. Everyone seems okay with looking at innovative ideas towards equity on water and wastewater rate setting.
They kick around other ideas: education, providing thermostats, mid-month notifications of your usage, and so on. Rebates from the Sustainability Committee for low-flow toilets and rain barrels. Finally it’s kicked over to staff to do some homework on the topic.
Shane Scott gets the last word. He wants to order staff: “Our customers want lower prices. Make it happen.” He is so mad that council can’t just march in and slash rates. And this is why I shout angrily at my computer while watching council meetings.
Finally: I was worried someone was going to suggest privatizing utilities to save money. Do not fall for this. This is a terrible idea. Here’s how it goes:
1. City gets bids from private companies showing wonderful cost savings.
2. Accept lowest bid.
3. City dismantles the department, lets people go, and generally loses the ability to return to the previous version.
4. Private company does a dreadfully shitty job and goes over budget.
5. Over time, bids escalate far more than the city’s costs would have.
Private companies want to turn a profit, which means charging more and delivering less. Don’t use private companies for public goods.