Tuesday, April 24, 2012

No need for large water revenue increases in West Linn


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       No need for large water revenue increases in West Linn

This column by Bob Thomas will also be on his Blog at--  http://informingWL.blogspot.com


     This column stresses that there have been and still are plenty of funds available to carry out a program for replacing all of West Linn’s old deteriorated waterlines without asking voters to approve increases in water rates beyond the charter limitation of 5% annually in order to accomplish that.  It points out that these funds have been misdirected elsewhere and should be redirected to maintain such an ongoing program.  It also points out that if bonding (revenue bonds or alternatively general obligation bonds) might be needed to replace the old 2 million gallon Bolton Reservoir with a new Bolton Reservoir, that it should not be replaced with the excessively large 4 million gallon reservoir costing an estimated $8 million as proposed in the very expensive and unnecessary 2008 adopted Water Master Plan (initiated and promoted by former Councilor Scott Burgess) but should instead be replaced with the adequate 2.4 million gallon reservoir costing much less at an estimated $3,515,379 in 2008 dollars, as proposed in the much less costly 2004 adopted Water Master Plan (written during the former Mayor Dodds Administration) that is adequate through build out of the City within its present boundaries.  It deliberately did not incorporate water facilities that make it possible to supply water for urban expansion of West Linn into the Stafford Triangle, as does the 2008 adopted Plan.

     One of the reasons the 2008 Plan costs considerably more than the 2004 Plan is because it involves building bigger water reservoirs than needed and building a booster pump station near the hilltop to pump water from a proposed new additional Bland Circle Reservoir into the Rosemont pressure zone from where it can be fed into the Stafford Triangle for urbanized expansion of West Linn.  This booster pump station has no other purpose.  But it is claimed, in the 2008 Water Plan, that it is needed to eliminate a deficiency in water supply to the Rosemont zone.  This is not the case.  An existing enlarged Bolton Pump Station with room for an additional pump can supply ample water up hill to the existing Horton Reservoir to supply all of the Horton zone’s needs through build out of the City within its present boundary.  And the expanded Horton Pump Station (that was required of a developer), which pumps water to the Rosemont Water Tower, and a new View Drive Pump Station that feeds a new transmission line going up into the Rosemont zone (all having been required of another developer) can both in combination supply more than enough water to the Rosemont zone through build out.

     Outrageously, the ruling council majority, consisting of Mayor Kovash and councilors Carson, Jones and Tan which always votes against and fails to vote for the best interests of West Linn and its residents, fairly recently approved construction of the above-described booster pump station under the excuse that it was required in order to supply a new elementary school on Rosemont with enough water.  That school can be supplied plenty of water from the existing capability of the Rosemont zone as described above without building that booster pump station.                                         
     Three fairly recent articles by a Tidings’ reporter relate to lack of a responsible ongoing program for replacement of old, deteriorated water pipes.  The first was in Nov. 24, 2011 Tidings, entitled “FLOOD of activity --- Rash of pipe breaks in one week speaks of city’s aging water system”.  The second was in Feb. 9, 2012 Tidings about a phone survey claiming public support for a “drinking water bond”.  The third was in Feb.16, 2012 Tidings about Council goal setting.  This included ruminations about various ways to generate large revenue increases to finance water infrastructure projects.
                                                                        Page 2

     There’s no excuse for lack of the above-mentioned ongoing program to replace old waterlines.  There’ve been ample revenues to fund it, but they’ve been largely misdirected elsewhere.  Redirecting them to maintain such an ongoing program would of course make any drinking water bond or other big increases in water-related revenue entirely unnecessary.  The revenue sources to fund this will be elaborated upon further along in this column.

     Also, in his state of the city address on March 6, 2012 given preferentially to the Chamber of Commerce up at the Oregon Golf Club at taxpayers’ expense instead of at no expense if presented to the general public at City Hall, Mayor Kovash spouted his usual misguided and unsupportable claim that we have a growing $21 million dollar problem.  He, like the rest of the ruling council majority, which includes Jody Carson, Mike Jones and Jenni Tan, remain stubbornly and foolishly wedded to the unnecessary, oversized and excessively expensive new Water Master Plan adopted in 2008 which claims there is a need for $21 million in supposedly “required” water infrastructure projects.

     Among these supposedly “required” projects are means to begin supplying water for expansion of West Linn into the Stafford Triangle.  The consulting firm which devised the 2008 adopted Plan, the city engineer, the staff’s water operations supervisor and no member of the ruling council majority will ever acknowledge that to be the case, but it is nevertheless.

     As explained in the INTRODUCTION, there is no need for the larger water reservoirs (larger than in the 2004 Plan) nor the booster pump station (not in the 2004 Plan) called for in the very expensive and oversized 2008 Plan other than to supply water to begin urban development of the Stafford Triangle. 

     The 2008 Plan should be abandoned and the much less expensive ($6,914,000 less) 2004 adopted Water Master Plan should be retained.  It is perfectly adequate through build out within West Linn’s present boundaries and deliberately did not include means to supply water to the Stafford Triangle.  It proposes an ample-sized new Bolton Reservoir of 2.4 million gallons costing an estimated $3,515,379 in 2008 dollars in contrast to the $8 million estimated cost for the larger 4 million gallon reservoir proposed in the 2008 adopted Plan.  Councilor Cummings has repeatedly pointed out that according to the City’s official build out population there remains room for not more than 6000 more people, for which the proposed new 2.4 million gallon Bolton Reservoir in the 2004 Plan is perfectly adequate.

     Previously, at a goal setting meeting, the ruling council majority advocated two different ways to raise money to replace old deteriorated waterlines at an erroneous estimated cost of  $10 million and replace the old 2 million gallon Bolton Reservoir with an oversized 4 million gallon reservoir at an estimated cost of $8 million in 2008 dollars (as called for in the 2008 adopted Water Master Plan).  One of the ways considered to raise money for financing these water projects was to ask voters to approve water rate increases beyond the charter limitation of 5% annually in order to finance revenue bonds to be spent on such water projects.  The other way suggested was to ask voters to approve general obligation bonds to finance such water projects at a related increase in property taxes.  All of this is totally unnecessary.  It’s based on the fallacious assumption that the 2008 adopted Water Master Plan has to be followed and financed.

     In Nov. 2010 voters were asked to approve Measure 3-364.  It proposed raising water rates considerably beyond our charter limitation of five percent annually to finance revenue bonds to pay
for $21,000,000 in supposedly “required” water infrastructure projects listed in the unnecessary, oversized and excessively expensive new Water Master Plan adopted in 2008.  Instead, the perfectly adequate and much less expensive ($6,914,000 less) 2004 adopted Water Master Plan should be retained.  Voters wisely turned down Measure 3-364.  They should do likewise whenever a similar measure appears on the ballot.     The Dodds Administration (prior to King Administration) replaced 14,630 feet of old
                                                                                    Page 3

waterline.  It recommended the remainder of old lines be replaced at a rate of at least 5,000 feet per year.  Inexcusably, only 5,060 feet were replaced early in the Mayor King Administration and none since.

     Two sources of funds should have been used to replace even more than 5,000 feet of old pipeline per year but have been misdirected elsewhere.  One is an ongoing annually recurring general fund revenue of approximately $789,000.  It became available after voters approved permanent annexation of West Linn into the TVF&R fire district.  The other source is the annual revenue the city gets from our water bills.  Domestic water rates have been increased nine times by 5 percent each since beginning of King Administration in 2005, making a total increase since then of 55 percent.  This revenue pays for purchasing our water from South Fork Water Board and for supporting water-related public works personnel.  After these items are paid for there is a considerable surplus left over to pay toward water system maintenance, including old pipe replacement.  This surplus has inexcusably been used elsewhere.

     The above two sources of annual revenue have been more than ample for replacing over 5,000 feet of old pipeline per year since 2005.  They could continue funding all categories of necessary water projects at an adequate rate into the future without asking voters to approve big water rate increases beyond the charter permitted 5 percent increase per year.

     But the above two sources of revenue for replacing old pipes have been largely used elsewhere.  This includes helping pay toward an excessive level of police funding, funding water-related public works personnel who should have but weren’t doing waterline replacements, and contributing to supporting other staff through transfers from the water fund.

These two funding sources need to be properly used for replacing old water pipes.


     The city is forming a task force made up of members from the Utility Advisory Board (UAB) and other residents with a focus of gathering information on community interest in replacing the city’s Bolton Reservoir and miles of corroding water pipes.  It’s hoped that all of the information will be gathered by June, which would give the council until August to decide what projects would go before voters in the fall.  In a practical sense, this is a bunch of nonsense in regard to replacing so-called miles of corroding water pipes.  All water pipes that need to be replaced can be replaced by utilization of the above two funding sources.  The UAB presumably cited what is discussed below Table 8-1 on page 8-2 of the 2008 Plan where it says there is 54,300 feet of Asbestos Cement Pipe (AC pipe) to be replaced.  At the top of page 8-3 it’s claimed there is 11,500 feet of old galvanized and steel piping to be replaced, not 14,000 feet as claimed by the UAB.

     The UAB, perpetually chaired by Ray Kindley for many years, has no incentive to look into and acknowledge what I have pointed out above about the two longstanding funding sources that have been available for replacing old water pipes, but which have been largely misused elsewhere.  Kindley and all other members of the UAB simply function to rubber stamp what they know the ruling council majority wants in regard to unquestionably advocating and perpetually beating the drums for raising monies to implement what the 2008 adopted Water Master Plan unjustifiably calls for in supposedly “required” water infrastructure projects costing $21 million, as discussed above on Page 2.  One can roll the UAB and the ruling council majority all into one ball that talks the same nonsense about a nonsensical dire need to raise money to implement the 2008 Water Plan.      


                                                                                    Page 4

     Regarding the police funding, several excessive proposed police levies were put before the voters in 2007 and none passed.  The last and lowest one put before the voters was 84.87 cents per thousand dollars of assessed valuation.  It likewise failed but the city nevertheless financed the police at the same level as if
that levy had passed.  It has done so by partly utilizing the above annually recurring $789, 000 and by the notorious imposition of new fees (the bright idea of imperious city manager Chris Jordan and approved by ruling council majority).  This is a prime example of the city thumbing its nose at the voters.

      The following explains why the city’s last requested police levy rate of 84.57 cents per thousand was excessive:

     The 5-year police levy approved in 2002 was a dollar-based levy with a rate of 75.5 cents per thousand.  A dollar-based levy limits the total revenue raised over the levy’s term to a fixed amount.  The Dodds Administration, at councilor Kapigian’s suggestion, converted the levy to a rate-based levy on July 1, 2003, whose revenue automatically increases in proportion to annual increases in the city’s total assessed valuation (which was increasing over 5% annually at that time).  The Dodds Administration soon observed that the 75.5 cent rate was raising considerably more revenue than needed to support the 12 police on the levy.  So on July 1, 2004, it reduced the rate to 50.5 cents, with then councilor King wanting to reduce it even further.  At this reduced rate, the Dodds administration still passed on to the King Administration an ending fund balance in the police levy fund of at least $576,000 and undoubtedly considerably more.  The city’s finance officer at that time would not answer how much more that was.

     When the King Administration came into office it notably reduced the rate even further on July 1, 2005 to 48.4 cents because it concluded the levy was still bringing in more revenue than needed.  But even more notable, on July 1, 2006, it increased the levy rate back to its original figure of 75.5 cents.  This was entirely unnecessary, as were the later even higher election proposals, which were all rejected by the voters.  The last one put before the voters was the 84.57 cents per thousand dollars of assessed valuation.  As mentioned above, it also failed but the city nevertheless financed the police at the same level as if it had passed.

     The Dodds Administration had proved that a rate of 50.5 cents was most ample to support the 12 police on the levy.  The King Administration’s reversal to 75.5 cents freed up monies in the general fund considerably beyond those needed to go toward supporting the police department.  This would have been even more the case if the subsequent excessive proposed levy of 84.57 cents per thousand dollars of assessed valuation had passed,

    The city was very greedy in trying to get excessive police levies passed in order to use the consequently freed up general fund money for purposes other than funding the police department.  If the city had stifled its greed and put forth a police levy of no more than 55 cents per thousand dollars of assessed valuation, the voters would undoubtedly have passed it.

     It’s obvious that since the Dodds Administration we have not had a city government that has been honest, forthright and acting in the best interests of the residents of West Linn, as did the Dodds Administration.  Except for Councilor Teri Cummings, the rest of the present council members have been irresponsibly taking the kinds of actions that have and will continue to waste considerable amounts of tax and ratepayer monies and fail to protect the best interests of West Linn and its residents by making very unwise and unsupportable decisions and commitments and refusing to take obvious and needed actions to protect such interests.