Good to Have Him Back, Isn't It?

Welcome back, New Albanian. We missed you. Well, not the NBA-mania, but the rest, you know? Our favorite publican has a knack for the "reveal" that adds spice to life in New Albany.

Speaking of spice, readers, have you declared your preference by adding the NA Confidential T-shirt to your wardrobe? I wear mine regularly, alternating, of course, with my own more commercial bookstore T. The light gold shirts are available in all sizes, exclusively at Destinations Booksellers in the heart of the historic district, emblazoned with the slogan "New Albany is a state of mind...but whose?," and the most popular URL in town.

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Amid the growing buzz about the release of our "down payment" on the city-county jail, I keep waiting to hear a responsible public official explain how this money might be used in the next few years. I have my own ideas, but I'd sincerely like to see some reality-based thinking from elected officials.

An obvious priority for the city is to divert tax dollars to sewer maintenance. The sanitary sewer operation is a business enterprise of the municipality, and independent, but it goes without question that we have neglected the ongoing maintenance and upgrading of the actual sewer lines. Continued neglect is just courting trouble.

This writer recognized the need immediately on reaching this shore, and I've yet to meet anyone who disagrees that we need to boost spending and try to stay ahead of the curve of natural decay and obsolescence. It's so obvious that it hardly merits discussion, given the fact that there is universal agreement. I remain baffled by some of the screeds that circulate as if it was not a recognized problem.

Nonetheless, there is a deep confusion about how much of the operational maintenance should be borne by the utility and its rate-payers, and how much should be borne by the taxpayers.

For almost two decades, the indebtedness for jail construction has required the city (and the county) to maintain a reserve balance in cash sufficient to satisfy a period's worth of bond payments. As the bonds are retired this summer, that "deposit" again becomes available.

I think it is clear that we are some years away from a need to borrow for additional jail space. In fact, I'm suspicious of those who beat the drum so loudly about it. It is all well and good to anticipate a need, but the immediacy is not there. Local crime rates are falling steadily, and at least for now, Floyd County is not in crisis, nor in danger of facing a constitutional decree. It may, and probably will, come, but not immediately.

A portion of what has sheepishly been called a windfall (the $2.5 million, plus the freed up annual bond payment) can be allocated to increase sewer line maintenance. Under the recent agreement with the EPA, the sewer utility committed to at least $500,000 in annual expenditures. A case can be made that the utility could spend another quarter-million and we'd still be rolling the dice.

But the idea of dumping the cash into the sewers to avoid a rate increase is misguided. It is the opposite of prudence.

Under the existing bond agreement, sewer rates must generate enough to cover all operating expenses, replenish the reserve, and then spin off a minimum of 125% of the annual bond obligation. A direct cash infusion aimed at preventing a rate increase is not permitted. The rates themselves must provide all the operational funds plus 125% of the bond payment. Playing games by commingling tax funds with enterprise funds is a clear violation of the bond agreement.

To freeze the utility rates or subsidize them with tax dollars is a shell game. It's unlawful and unwise. The sewer board needs to put the enterprise on a sustainable footing, supported clearly by rate-payers, including new connections.

It is obvious that brazen political manipulation is the goal. The ex-officio sewer board members who represent the city council are calculating the electoral cost of a sewer rate increase. I suspect they are gambling that an illegal subsidy from "found" money will be safe, and that bondholders won't grumble so long as they receive their payments. Mr. Seabrook will face the voters this fall, and presumably next spring and fall, and is of course wary of being tagged with blame for a rate increase. Mr. Kochert is, of course, retiring from public service, but he, too, is sensitive to what the spin might be on his legacy.

I'd like to commend the sewer board for the responsible way it insisted on segregating the sewer operations from other city operations. They have laid the groundwork for a future where the sewer utility will operate as designed, paying for its own operations and only its own operations. The board can continue to act responsibly by setting a rate sufficient to meet the actual operational needs of the system.

The city must be extremely careful in how it structures this. Any tax money dedicated to the sewer operation must be a capital expenditure, not an operational subsidy. The "windfall" money can be used only to accelerate the upgrading of the system, not to subsidize rates or delay a necessary increase. If, without the "windfall," a rate increase is imminent, then the rates should be increased. The "found" money may only be used for non-operational expenses - that is, to move the infrastructure further from collapse.

If you see anything else going on, you'll know it's self-serving electoral chicanery.

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Aren't you glad The New Albanian is back? A steady diet of this would kill us all.