Letter to Editor

Letter to the Editor

10/29/19

As a utility customer and tax paying resident of Monroe City, I had many questions and concerns regarding the new sewage system project and proposed financing.  Therefore, I attended the first public meeting to learn and ask questions.  Unfortunately, the scope of the meeting turned out to be solely focused on the engineering firm’s explanation of the project itself.  City management present was not prepared to answer specific questions and instead invited me to bring my questions to the next city council meeting.  So, I went.  

Unfortunately, the topic didn’t make it onto the meeting agenda and no request was made during the open session to solicit those questions.  To be fair, much of that time was consumed with a lengthy but helpful presentation and discussion of water quality and sourcing options.  (yet another lingering infrastructure issue for the city)

Since I haven’t gotten any answers and get the feeling that a lot of my questions and concerns are shared by many others in town, I thought I would throw some things out here.

First off, given our limited voting choices, voting YES on the bond issue is (by design) a no brainer.  The issue I have with it is this is the only choice we are being given at the polls.  Do you want your sewage rates to double or triple?  Well I guess I’ll choose double.

I have zero doubt that our 45-year-old waste treatment plant is well beyond its effective life and that DNR requirements have grown more stringent over the years.  What boggles my mind is the fact that we apparently have ZERO dollars set aside for this eventuality.  Not one penny over 45 years?  Surprise, now we need 10 million dollars and we are going to pass off financing 5.5 million dollars by jacking up our sewage rates.  To some, an additional $50 or $100 a month isn’t the end of the world but to many others it is a huge deal.  

Why can’t we get more creative in how we pay for this new plant?  I’m told the city has over 3 million dollars in reserves (emergency fund).  Why can’t we use some portion of this money to offset some of this loan cost?  That’s something I would be more excited to vote on.  If a failure to plan for major infrastructure obsolesce isn’t considered an emergency, then what is?  I’m not suggesting we drain every penny but certainly some of it could be set aside to help reduce the necessary rate increases being proposed.  

What are our options in re-directing existing revenue streams away from less critical needs and towards project costs or loan repayments?  How much revenue flows into the reserve account annually and can we re-direct some or all those funds to this project instead?  Are there other, less critical projects that can be delayed or cancelled?  Sales tax increase?  Let’s see a few more options.

The current bond/loan proposal has a 35-year term for repayment.  We were told a reasonable life expectancy of the new plant would be 25 years. So, we will be stuck with 10 years of rate hikes and loan repayments with another obsolete plant?

How will the rate increases be rolled out?  I doubt if we borrow all the money at once.  Will the rate increase phase in as our borrowing occurs?  Will there be transparency on how this is administered?  Will the city breakout the rates to show how much is going to the loan repayment and the balance being our normal rates?  Is it a simple interest loan or is it front loaded with interest payments?  Will our rates be adjusted back down as the debt is reduced over time?

We can’t go back in time and fix our lack of long-term planning, but we can certainly ask current management to please learn from our mistakes.  Going forward how do we plan and budget for the proper maintenance and eventual capital expenditures necessary in the future to maintain all the city’s critical infrastructures?

If it is truly the city’s goal to minimize the financial burden on users, then it is going to take much more time and effort than simply borrowing money and passing the additional costs directly off on utility rate increases.

We must hire out engineering expertise perhaps it is time to seek out some financial expertise as well.

Sincerely,

Keith Herron

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