On February 8, the City will, or already did (depending on when you read this), raise water and sewer rates. The citizens have been told that rate increases are needed to replace the antiquated water and sewer plants. Well, that is only partially true. If you looked closely at the worksheets from the November 27th work session, you would see that the City was presented with two sewer scenarios: Scenario 1 is a new 12 million dollar sewer plant, Scenario 2 is doing nothing to the sewer plant. Let's take a look at Scenario 2.
Scenario 2 shows the average water rates going up 122% over our current rate by 2028 even though we aren't doing any improvements to the sewer plant. Our current average sewer rate is $18.34. In Scenario 2, the average sewer rate will go to $27.50 in 2024, $33.00 in 2025, $37.96 in 2026, $39.28 in 2027, and $40.66 in 2028. Remember those numbers because they will be important a bit later.
If the City does nothing to the sewer plant, our rates are still going to double. How can that be? Here is the honesty that has been missing from the City. The City has been running a negative balance in the sewer fund ever since Bud Maynard became mayor in 2018. The negative balance was up (or down depending on how you look at it) to a negative $736,767! The Council has failed in their basic fiscal responsibility to keep the City sewer enterprise fund solvent by raising rates to keep pace with increased expenditures.
With that being said, let's revisit the rate increase we will all be paying in March. This is for Scenario 1 which is a new sewer plant. Scenario 1 average sewer rates will be $45.84 in 2024, $68.76 in 2025, $72.20 in 2026, $75.81 in 2027, and $79.60 in 2028. Now, remember those numbers from Scenario 2? Let's bring those into the equation. If the City does nothing to the sewer plant, our rates are still going up. So, we can deduce from comparing both Scenarios that the true cost of the sewer plant is really the Scenario 1 rate minus the Scenario 2 rate. So, only roughly 50% of the new sewer rate increase is actually going to pay for the new sewer plant. The rest is going to pay for poor fiscal management by the City.
In 2024, 60% of the total sewer rate increase can be blamed on poor fiscal management.
In 2025, 48% of the total sewer rate increase can be blamed on poor fiscal management.
In 2026, 52% of the total sewer rate increase can be blamed on poor fiscal management.
In 2027, 49% of the total sewer rate increase can be blamed on poor fiscal management.
In 2028, 51% of the total sewer rate increase can be blamed on poor fiscal management.
It is finally time to place blame where blame is due. Can someone be blamed for the need to construct a new water and sewer plant? Absolutely not! It was old. It was time.
However, blame for 50% of the new sewer rate increase can most certainly be placed on individuals and they need to be held accountable for their failure to keep the sewer enterprise fund somewhat solvent.
#1 - Chris Ward, City Administrator - 70% Blame
Chris Ward began working for the City of Vinton in May of 2014. Since 2018, or roughly half of his tenure in the city, he has allowed the sewer enterprise fund to continually operate in the red. Water and sewer rates have not been raised since 2012.
The City Coordinator's duties are outlined in City Ordinance 21.04. Here are just three of the responsibilities shown in that ordinance:
"13. Finances. Keep the Council fully advised of the financial and other conditions of the City, and of its future needs.
14. Budget. Cause to be prepared and submitted to the Council annually, the required budgets.
15. Business Officers. At all times, see that the business affairs of the City are transacted by modern and scientific methods and in an efficient and business-like manner, and that records of all of the business affairs of the City are fully and accurately kept."
City Ordinance 92.02 requires that water rates be evaluated annually
". . . . The rates shall be reviewed on or before the beginning of each fiscal year to ensure sufficient revenue for operation, maintenance, replacement and debt service requirements."
I don't know about you, but if I don't keep my lawn mowed or put a sign in the wrong place in my yard, I get a visit from the Code Enforcement Officer. I guess he doesn't enforce violations on the council. Another example of "rules are for thee not for me."
Chris Ward is the day-to-day administrator of the City. It is his responsibility to keep the part-time council members informed about what is happening in the city. I find it hard to believe that a negative $700,000 sewer balance went undetected.
Maybe Chris should spend less time looking for grants that lock us into long-term commitments and associated costs and more time doing his basic job of fiscal management.
#2 - Mayor Bud Maynard - 28% Blame
Bud Maynard became mayor on January 1, 2018. During his tenure, the sewer enterprise fund is continually underfunded. Mayor Maynard has had 5 years before now to get the sewer and water rates to the point where they actually pay for the expenditures plus a little extra. I have gone back through all of the City of Vinton Audits on the State Auditor website. It only goes back to 2021 but I verified that the sewer enterprise fund has increased its negative balances for the entire time he has been mayor.
So, what are Mayor Maynard's priorities? It certainly wasn't a solvent sewer department. However, it appears to be construction projects totaling 3 million dollars that went to the company for which he was working at the time. It also included an expensive development agreement for the Braille School with a company that keeps breaking their promises. All Hobart has done is take money out of the property. He hasn't invested like he said he would. It's so
bad, that the City Council isn't sure if there is going to be enough new property tax revenue to pay for the police and fire station. Don't forget about the glow in the dark trail and the need for a new rec center. Obviously, all of the above were more important to Mayor Maynard than taking care of the sewer system.
#3 and #4 - Tami Stark and Ron Hessenius - 1% Blame for each
Tami Stark has been on the council since 2012. She is mayor pro-tem. I will give her credit though; she was the only council member to speak up about why the rates had gone unchanged since 2007. 12 years on the council. She is the third longest serving member on the council. Her inaction and failure to ask the tough questions about negative balances in the sewer fund cannot be unmentioned.
Ron Hessenius has been on the council since at least 2006. He and Bud Maynard share the title for longest serving current member. Serving 18 years on a council comes with responsibility and consequences. He shirked his responsibilities with respect to sewer rates and he must suffer the consequences.