Utility Rates Cause Uproar During City Council Meeting

Don Cobb addressed the Stamford City Council during the special public hearing last Friday afternoon to discuss the city’s water grant and impending utility rate raise.
Don Cobb addressed the Stamford City Council during the special public hearing last Friday afternoon to discuss the city’s water grant and impending utility rate raise.

By Will McClure

 

Tensions were high during a special called meeting of the Stamford City Council last Friday afternoon, specifically towards the council’s vote over a much-discussed and unpopular $15 rate hike on consumer’s water utility bills that will help pay off a loan which the city received earlier this year for water improvements which include the construction of a new water treatment facility. Originally scheduled as a public hearing on the proposed tax rate increase of 3%, an additional addendum to the hearing was posted on Tuesday, September 6, which added an address by Don Cobb as well as to discuss and action on the utility rates. With all council members present, Mayor Johnny Anders called the meeting to order and asked Councilmember Melinda Smith to give the invocation, followed by the Pledge of Allegiance led by Councilmember Pam Reither. Anders then opened the public hearing portion of the meeting by allowing the citizens present to openly speak to the council about the tax rate.

The proposed property tax increase, which would be $.95275 per $100 or a 3% increase, would be used to help the city make equipment purchases as well as be able to raise hourly rates for city employees, specifically new hires who will see their rates go from $7.75 up to $9.75 or $10 an hour. Anders stated that the increase will help provide more of a livable wage for city employees as well as increase employee retention. When asked if the city’s rates were below the national average, Anders said that while the council did not know the national average, a study of cities in the surrounding areas, save for one, had hourly rates in the $10 area. The rate increase, while it will substantially help city employees, will ultimately prove not to be as much of a raise in property taxes, however. City Manager Alan Plumlee gave an example of a $100,000 home’s rates being raised by $2.71 a month as well as a $40,000 home’s being raised by $0.92 a month, or $11.10 per year. This helped lower the concerns of the citizens in attendance, knowing that rates will be going up by so little, but would make a bigger impact in helping areas of the city. With no other discussion needed, the public hearing portion closed at 1:10 pm, where at that time Anders turned the meeting over to Don Cobb to address the citizens in attendance and the council.

Cobb began his presentation by stating that there were some difficult issues to address in regards to Stamford’s water situation, stating that clean drinking water should be seen as a blessing instead of a privilege, citing how other communities have little to no drinkable water. He stated that Plumlee came to him three weeks prior with the city’s budget and asked him to look over it in conjunction with the water grant loan agreement to look at options in repaying the loan. The grant had an original primary financial report on August 25 of last year of $19,179,750, which would cover replacing the water line from the lake to the treatment plant, build a new plant itself and replace existing and outdated water lines to help bring Stamford’s water system to compliance. The preliminary hearing with the bond council would forgive most of the near 20-million-dollar project in the form of a grant, leaving a net debt of $8,145,000. At the time, it was discussed that water utility rates would have to be raised by $13 if this estimated amount was met. It was not until March of this year where the Texas Water Development board approved the city a grant of $19,765,708, forgiving $10,235,708 and leaving the city with a loan of $9,530,000 to repay over a 30-year period, entering a contractual, legal obligation. Cobb continued his presentation by stating that once the agreement was made, the “clock” began running for the city to start looking at options to repay the loan and has been building over the previous four months. He went on to say that everywhere he goes to give speeches like this, he tells everyone that they are getting a bargain with clean drinking water, reiterating his stance that fresh water was a blessing and not a privilege. He noted that in December of last year, the city of San Angelo also had to raise their water rates by 50%, stating that water is precious, expensive and will always be that way.

Cobb concluded his presentation by stating that the city will have to make the first payment on the loan on February 15, 2017 in the amount of $340,152, with the city needing to set aside at least $56,692 a month into an interest sinking fund that will allow them to pay on time, albeit still a bit behind, thus leaving the only option at this point to raise water rates by $15, stating that while it will not be a popular thing to do, if the city does not do so, they will have a very difficult time catching up to make the payment.

This report caused an almost instant stream of discussion amongst the citizens in attendance. Stamford citizen and former member of the city council Gwen Baker addressed the board to ask if there could be other avenues to help alleviate the debt and not have to raise the rates by that much, citing Pam Reither’s suggestion from a previous meeting where the hospital, at one point, froze salary raises for the top positions to help their financial situation. In this case, the raises for the newer employees would still take place, but the city officials in the higher offices would not take a raise this year, allowing the money saved to go to the debt. When she also suggested that something can be done with the $50,000 set aside for a fire chief, Councilmember Leldon Clifton argued that while Plumlee is assuming the duties as an assistant fire chief with his City Manager duties, that money would need to be left alone in the chance that a chief is found to take over the duties.

Another main concern raised by the citizens in attendance was how the rate would affect elderly residents living on a fixed income. Many argued that many would have trouble trying to take that extra $15 a month from food and/or medicine to pay for their water bill, pleading with the council to see if there can be other solutions in which the council said that they had trouble coming up with these solutions, with members being completely against the rate hike. When asked why the decision is coming down to the wire, lack of solutions and other avenues were cited as the answer. Although the citizens were assured that the $15 per meter raise would go directly into paying for the loan, many in attendance were still arguing for other solutions as Anders called for the council to make a motion to approve the rate hike.

Leldon Clifton quickly made a motion to approve the raise, stating that every hour they wait to do something will only make the situation much worse. Councilmember James Decker then quickly jumped in to say that not only will he not second the motion, but felt blindsided by the fact that the decision was being made on a Friday afternoon in a special meeting on short notice instead of being put on a regular meeting agenda and giving the council more time to do more research on the budget knowing when the decision had to be made. He went on to state that when he received the addendum on Tuesday, he had no idea about the $15 raise until Cobb reported it. Plumlee interjected by stating that they had four months to look at the budget for solutions and he had worked on it for all that time to bring a balanced budget with no feedback from the council, who had approved the budget as presented. He said that the fact that Decker wanted to go back and revise it now felt “like a slap to the face.” Although Decker argued against the motion, Melinda Smith offered the second, but before the vote could take place, Stamford resident Gary Decker spoke up to state that while the rate hike did seem inevitable, it was ultimately a “shady deal” that the council was wanting to vote on this major change on a special Friday afternoon session on short notice instead of during a regular meeting with enough time to give the citizens fair warning and a chance to speak up, echoing the sentiments given by James Decker. After a verbal exchange between Gary Decker and Clifton, there was a suggestion to amend the motion to instead add the vote to a regular meeting, which resulted in Clifton quickly arguing that a decision needed to be made immediately. When it was also suggested that the council go ahead and accept the rate hike and review solutions in two months’ time, many attendees argued that with elections coming up, by the time the council would return to the issue, many members may not be there and would result in the issue being glossed over or “forgotten.”

Faced with the absolute fact that the city will have to make payments, Anders once again called for a vote admit rising tensions in the meeting room. Smith reiterated her second for Clifton’s motion as the meeting room grew louder in protest. However, while Clifton and Smith both approved the increase, Councilmembers Reither, Decker and Dennis Braden voted against it, causing the rate hike to fail by a vote of 3-2. Anders quickly called for an adjournment at 2:32 pm, allowing members of the public and members of the council to leave with emotions of sadness, disgust and anger.

 

The council will be holding their next meeting on September 19th, with the agenda unknown at this time. However, it can be assumed that water rates will once again be on the agenda as decisions needs to be made as quickly as possible.

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