Letter to the Editor

More information on rate increase

Wednesday, November 16, 2011

Dear Editor:

This letter is in response to questions raised by one of the local newspaper editors in the Nov. 9 newspaper. The request was for additional facts regarding the proposed rate increase. These are the facts:

1) In 2004, the city was advised by Sprenkle and Associates that a $6.4 million problem existed with our water lines. The current rate structure voted on last Monday only addresses the current operation cost and some reserves for major water repairs, but leaves nothing for the $6.4 million dollar problem. If we use the surplus gained from the efficiency of the new water meters, it will still take us over 26 years to make the necessary repairs --that is assuming no inflation or expense increases.

2) Between 2001 and 2010 our water and sewer operated with a $2,375,343 deficit from inadequate rates. Last year alone the shortfall was $584,018. Funds taken from the general revenue to meet the shortage in water rates were taken from funds for our streets, parks, etc., which have thus suffered from this consequence. Since our water rates have been billed for 14 years at less than 50 percent of cost is this not a reason alone for drastic measures now? Inadequate rates are a direct violation of DNR guidelines.

3) Federal and state agencies increase regulations and pressures continually for clean water -- drinking and sewer. These are not optional mandates. Failure to respond can lead to steep financial penalties and could cost more than a rate increase. This is reality, and we are not immune because we are a small community.

4) Rules of DNR -- Chapter 3 -- Permits -- Code of State Regulations states, "Revenues from drinking water sales should cover all public water system costs for the system, including operating costs, maintenance costs, debt service costs, operating reserves, debt reserves, emergency equipment replacement reserves, and revenue collections costs."

5) The 2005 bond extension was the 1/2 cent Capital Improvement Sales Tax originally voted in 1991, and had a 20-year sunset provision. That tax was extended in 2005 to 2025 for sewer bonds. That sales tax has 4 bond issues attached to it for a total in 2012 of $371,000 of an estimated $400,000 in revenue. All bond indebtedness associated with the water-sewer infrastructure was factored into the Missouri Rural Water Assn. (MRWA) water-sewer rate proposals.

6) Regarding the Wal-Mart tax abatement linked to the water tower, the development fee was for the infrastructure development at the Super Center, which included the water tower, water-sewer lines and street improvements. It expires either when $1,575,000 is paid, or in seven years. Seven years will be up in 2013. These future funds cannot then be used to supplement water and sewer rates.

7) How are the water meters being paid for? The meters are coming out of the COP funds. There is $300,000 left. Once those meters are purchased and the COP funds spent, there are no other funds available for any major emergencies or maintenance.

8) A memo from Kevin Ness, Chief Water Pollutions Section of DNR on April 2, 2009 to the Mayor stated that "The City of Cassville must evaluate the user rates to ensure that adequate funds are available to operate, maintain, and upgrade the wastewater treatment and collections system. The upgrading portion would include any bond indebtedness that the city may incur for infrastructure improvements."

9) Over 70 percent of the consumers use less than 5,000 gallons of water a month and only 7 percent use more than 10,000 gallons of water a month. Water rates only double if you use more than 5,500 gallons of water. If you are under that amount, you will see a significantly lower rate increase.

Engineers were hired to evaluate our water and sewer system. For the council members who voted no, I ask, "What information previously obtained was flawed for a NO vote? The task force evaluated all scenarios to present a minimum proposed rate needed. Why are some task force members contributing responses now vs. giving input in the task force meetings? What new revelations were discovered?

People come to Cassville because we have a great community and because of the quality of life we provide --not because of the water rates. If we don't continue our investment in our water and sewer system and to move our city forward, that quality of life will deteriorate.

Through research of the above data, I would like to thank the Task Force for assisting the city by making their recommendations which the city adopted. I would also like to again extend my appreciation for the folks who are making the right decision in a difficult situation. I believe it would be reckless to act otherwise.


Bob and Carolyn Bishop

Cassville, Missouri