They did it again. Last night at Council (CoW), while discussing the city’s financial outlook, it was reported that the Water Fund is operating at a deficit, and, whew! good thing they raised water rates or else it would be really out of control!
What a crock. The Water Division is a money maker (pp. 96-7). What happens is, the city transfers $500,000-$525,000 every single year to the Black Hole General Fund. In FY2010, the Water Fund will also pay out more than $800,000 in debt service and loan payments. They siphon, then have to borrow money for–what?–repairs probably.
You know, between the debt distributed across four funds, underfunded pensions and that $29.4 million post-retirement insurance liability (which will not even be mentioned until after the budget is passed, unless one of us brings it up) we really are in hock up to our eyeballs. It’s anybody’s guess as to how long this house of cards can stand.
The level of trust we should put in city government, however, is not in doubt at all.
3 comments
Comment by yinn on May 12, 2009 at 9:26 am
Reprinting my comments to the Chronicle article on the meeting:
“1) There wouldn’t be a Water Division Fund deficit if the city would quit siphoning off $500,000 annually to the General Fund. 2) The “surplus” is manufactured by the failure to fill public safety positions. IMO it is MOL a ploy to keep the city’s bond rating out of the toilet. 3) Real savings could be realized by following financial consultants’ recommendations but the city is refusing to talk about them until after the budget is passed. “Not enough time.” Yes, that’s correct: not enough time to create excuses for ignoring recommendations, e.g. the outsourcing of IT functions.”
Comment by Ivan Krpan on May 14, 2009 at 2:08 pm
I have a question. If this much money is being transfered out of the water fund each year, how much of a profit is actually being made selling water?
I know that I was involved in a discussion once with Community Development and it was stated several times that the department could cover their costs etc but that they could not be charging fees and such that would make them a profit per say.
Why is this different when it comes to the water department? Why are they allowed to make such a profit selling the water?
You must be logged in to post a comment.