SNOW JOB: Utility bond vote wrongly blamed for rate hikes

Part Nine of a series on the Columbia city budget 

COLUMBIA, 9/18/10  (Beat Byte) --  Lies, damn lies, and rate hikes.

By voting for bonds like those issued for sewer upgrades in 2008, hadn't Columbia residents also signed on for city utility rate hikes to pay off the bonds?    KFRU radio host David Lile put this question to Columbia City Manager Bill Watkins last week, after the fib had been making the rounds.  

Yes, voters had approved those rate hikes, Watkins explained.  It was all part of the deal when the bonds -- debts incurred to build new systems and upgrade old ones -- passed with large majorities. 

But if they were following City Hall's well-orchestrated sell job, voters approved no such thing.  Bonds are routinely sold in Columbia/Boone County as a way to avoid rate or tax increases for the foreseeable future.   

Pass the bond, no tax hikes.  Pass the bond, no rate hikes.  

The 2008 city sewer bond was no exception.   A high-falutin citizens group hand-picked by then-Mayor Darwin Hindman made sure this message got out, while local media organizations touted the promised savings without questioning its false economics.      

"The city is asking voters in Proposition 1 to approve paying for sewer improvements using bonds," wrote Columbia Tribune reporter Kat Hughes in a March 2008 story.  "That means city sewer users would pay back the amount over a long-term period rather than paying upfront through higher rates during the next few years." 

Those higher rates, according to a diagram in the Tribune story (right):  a 450% increase over just three years ($11 average sewer bill in 2007 to $50 average by 2010), so outlandish it wouldn't have been even remotely feasible.  

After inquiring of fellow Council members after the rate hike scenario was proposed in early 2008, long-time Second Ward Councilman Chris Janku said he too believed that passing bonds was a "cheaper" alternative to rate hikes.

"Janku asked whether it was possible to use bonds to decrease the impact on users, similar to what the city is proposing with its $77 million sewer bond issue in the April 8 election," at a February 23, 2008 work session.  "When we just looked at this one for sewer, we found it was a lot cheaper than just using a rate increase," Janku said. 

Even Mr. Watkins jumped on the 2008 buy-bonds-to-reduce-rate-hikes bandwagon.  

"City Manager Bill Watkins said that’s something the city could look at, but it would have to be put to a vote whether it used the recommended rate increase or bonds.   Council members agreed the city should look at the possibility of using bonds to limit the rate increase as well as consider phasing in the recommended improvements over time."  

Columbia Tribune publisher Hank Waters weighed in, using the same argument in a March 2008 editorial urging bond passage. 

"If bonds are approved by voters on April 8, substantially lower rate increases will be needed stretched over longer periods of time," Waters wrote.  

But sewer rates are going up a whopping 15% this year -- seven (7) times this year's national average inflation rate -- after going up just two years ago.   They'll be followed by similar hikes for water, electric, and trash bills -- and a burden-shifting sewer-billing scandal that remains unresolved.    

So much for Columbia's big-hearted voters, sadly fooled once again.