New Albany: Sewer “Crisis” 2010: Part 5 – A Modest Proposal to Help out “Aunt Sally.”

With Randy Smith's permission, NAC is happy to reprint this series of five articles as counterpoint to the prevailing blather.

New Albany: Sewer “Crisis” 2010:

Part 5 – A Modest Proposal to Help out “Aunt Sally.”

Despite the fact that the council has signaled its complete willingness to give away the sewer utility and cast it into receivership, one can hope that rational minds will prevail.

What has been offered by our bondholders is a decent, if still painful solution that would require an immediate 36 percent rate increase, followed by a 19 percent increase in 2012. Annual increases of 3 percent would follow through 2016.

This 36/19 plan is simple arithmetic, but it’s hard to say that it is the type of deal that would be negotiated by a truly engaged city council. Before rejecting or accepting any of the three alternatives before it (70 percent now; 36/19; or relinquishing the utility into the hands of an outside sewer czar), why can’t the city council engage in politics the way it was meant to be?

Politics, it is said, is the weighing of competing interests, usually with the result that a majority chooses the weight of those interests.

The council, as I write this, is engaged in the worst kind of politics. They are willing to throw up “straw men” and take ideological stands, but they don’t seem to be capable of sitting down, raising their points, and then crafting a solution that addresses those points.

Blinded by pride, envy, hatred, and distrust of anyone or anything they don’t understand, and fearful of being fooled, the council is acting like 3-year-olds. They’re willing to say “no,” but they aren’t willing to work around the edges to fix the biggest problems. That’s true of most issues, but particularly true on this one.

Now, having thoroughly insulted the council, perhaps I’m not the one to offer an alternative, but here goes.

The “straw-man fallacy” is a tried-and-true technique frequently employed by demagogues. By distorting or mischaracterizing the choices before the council, a member tries to kill a proposal.

A “straw-man proposal,” however, requires members to brainstorm and discuss the pros and cons of a proposal and to inspire new and better proposals. In the U.K., it’s called an “Aunt Sally.”

Let’s dispense with straw men and go right to “Aunt Sally.”

The most common argument against the rate increase is that times are tough, especially for the poor, the unemployed, and those on fixed incomes. Of course, times are tough. They are tough for all of us and they are tough for the government that provides the services we demand. Since we can’t just stop paying for our sewers, shouldn’t we dispense with the “times are tough” argument?

But that doesn’t mean the loudly stated argument doesn’t give us a jumping-off point to craft a slightly better proposal, one that addresses the impact on the poor, the unemployed, and those on fixed incomes.

Let’s talk about Aunt Sally. She is retired, lives alone, and is no longer working. Her income is fixed, whether it’s a social security check or a government check supplemented by pension, annuity, or a drawdown of her savings. If Sally is the right prototype, she’s already paying the minimum charge for her sewer service. That’s currently $10.08 for usage under 200 cubic feet, as measured by her water meter.

Sally would see her sewer bill rise to either $17 or $16.20 by 2012. Even if she uses less water, she can’t evade a bill for this much because that is the minimum charge.

Couldn’t we tell Aunt Sally we understand her dilemma? Couldn’t we freeze her rate at the current $10.08 a month and save her as much as $84 a year?

Of course we could. But we would have to make up that subsidy somewhere else, because our creditors won’t accept the status quo with multi-million dollar deficits and the law won’t allow us to dump tax dollars into sewer expenses.

The best proposal on the table proposes an increase in the minimum charge to $13.85. That means we would have to make up $3.85 that we would have received from Aunt Sally and all those people now using less than 200 cubic feet of water per month.

I analyzed a recent monthy billing summary and discovered that of about 16,500 billing accounts, about 21 percent of them were billed the minimum. Systemwide, no more than 3,200 users are currently being billed the minimum.

We can freeze the rates for all of those accounts, those households, those businesses, and those rental properties, by the simple expedient of adding 15 cents to the rate. If we impose a 40 percent increase today, we can follow that in 2012 with an 18 percent increase. We’d still be paying less than a penny a gallon to safely and effectively move our effluent to the treatment plant. But we’d be saving the lowest-volume users, the poor, and those on fixed incomes from sharing the financial burden with the rest of us.

If Aunt Sally starts to use more than 200 cubic feet of water each month, the subsidy disappears. She joins the rest of us in carrying the burden. But if she keeps her usage down, she would see nothing like the increase the rest of us will.

If I may, I call this the “40/18/Freeze” plan.

It addresses the argument variously styled as “little old lady,” “granny,” etc. It shields those low-volume users on a fixed income. As an unintended, though not unmerited benefit, it allows the owners of vacant rental property to limit their expenses while the property remains unrented. And for some of us, it gives us at least a chance of reducing our sewer bill by implementing dramatic conservation measures that would reduce our usage below 200 cubic feet per month.

I ask the council to think of Aunt Sally. We have to raise the rates. We must make the city-owned sewer utility viable. We must pay our debts. But can’t we actually do so while helping out those who would experience the most pain from the increase?

For the record, my home usage and my business usage are comparable, running between 400 and 600 cubic feet per month. I will not benefit from the “40/18/Freeze” plan.