Monday, May 30, 2011

Austin water rate hikes foreseeable, foreseen

Here's a letter I sent to local Austin city beat reporters about rising water bills, decrying the city's efforts to downplay and/or mislead the public about massive rate hikes required to pay for Water Treatment Plant 4:

Perchance you received, as I did, an email from the SOS Alliance mentioning Bill Spelman's calculations of future Austin water rate hikes. It read, in relevant part:
Last summer the Austin Water Utility projected a five-year total increase in residential water rates of 30 percent.   ... Recently the Water Utility released its initial budget figures.  Councilmember Bill Spelman has analyzed the data - and calculated a projected 5-year water rate increase for residential customers of 66%.  Go to and click on the "spreadsheets here" link and look at the "monthly bill" chart.
That is an eye-popping sixty-six percent rate increase - and more than double the Water Utility's projection from just last year.  And it follows seven years of annual rate increases.  (If you just count last year's increase, the six year increase thru 2016 is projected at 74 percent.)
In that context, please recall that last year's SOS Alliance report on this very topic (attached, titled "The Perfect Storm") predicted - wait for it - a 74% residential water rate increase over six years from publicly available data !  I remind you of this to ensure that, if and when you report on the subject, you make it clear to your readers and/or viewers that these rate hikes were not a surprise. Don't, in your coverage, allow the Mayor, Greg Meszaros, Daryl Slusher, etc., to greet Spelman's calculations in your stories with quotes saying "We couldn't have known." They could, and they did. But they wanted to keep this fact out of the public debate until WTP4 bonds were issued, construction began and it was too late to do anything about it.

Spelman's calculations differ from mine mainly in that they cover the years 2011-2016, whereas my report estimated them for 2010 - 2015, and he's including sewer rates whereas I focused solely on water. (City staff shifted some of the increases from water to sewer in response to criticisms in the report.) But both analyses document the same, inexorable trend - water bills headed upward on a dramatically steeper curve than city staff and WTP4 backers were last year willing to admit, with most of the increase (far more than the city lets on) attributable to WTP4.

The calculations are not rocket science. Staff knew exactly what it would take to repay the city's huge new debt burden. The bond prospectus for new Water Treatment Plant 4 debt simply lied about growth in water use to make the numbers work, but in real-world budgeting such phony, politicized projections carry no weight. The future rate hikes Spelman and I documented were an inevitable and foreseeable outcome at the time they took that vote.

Though I'm no longer employed by SOS, having been retained only for that one research project, this still offends me. I've been around this town a long time and I don't mind losing a fair fight. But I certainly do mind losing because public officials don't tell the truth, or worse, as in this case, actively attempt to discredit truth-tellers.

This episode also speaks to the fact that Austinites were poorly served by local media in this affair. Anyone who investigated city claims about water rates last year would have easily documented these misrepresentations, as did my report, from available public records. But local media just took pols' word on rate hikes and adopted a "quote both sides" approach that equated falsehoods with facts. City staff based their public calculations on higher use levels even as the city was adopting per capita conservation goals that would on their face leave AWU short of revenue needed to pay for WTP4 debt (and demonstrate that we don't even need the thing). The situation would have been obvious if any reporter had independently examined the subject instead of simply quoting officials without verifying what they said.

That failure, of course, is now water under the bridge (or from the perspective of ratepayers, over the dam). But with a regressive new fee proposed which would assign the cost of AWU's misrepresentations disproportionately to the poor, you now have a chance to really dig into this and not just accept whatever falsehood is handed you in some official's formal statement. Rapidly increasing water rates and the new, regressive fee are a real burden on the public, and an honest discussion of that burden should have been part of the WTP4 debate. It's not too late. Good reporting on this issue still matters...a lot. Perhaps we'll eventually see some.