Below is part of what I stated at the meeting.
A few years ago, the Sumter County Commissioners voted to raise property taxes by 25%. I am sure that the county staff and other experts advised them that this increase was necessary and correct. We all know what happened next. At today’s NSCUDD board meeting, we are asked to raise our current CSU/SWCA water rates by 25% all at once or over a three year time period and to then increase our yearly compounded rates. Who can accurately forecast the future? I don’t know of a single person that can beyond one year at best. The Feds cant’ say for sure when inflation will be controlled or what degree of a recession we might face. And, raising our rate doesn’t help the fight against inflation and should be done very cautiously.
We purchased CSU less than four and then SWCA about two years ago based on forecasts created by experts and approved by staff. These forecasts certainly didn’t reflect any need to raise rates to our customers by 25% today. However, examine the R&R amounts in those valuation forecasts. We purchased both stating to our customers that we would be very careful about raising rates. As our costs to purchase the systems were large based of these forecasts, our bond payments consume most of our operating revenues. So, these two forecasts didn’t help in any way except to inflate our purchase cost.
We are now presented with a rate study that doesn’t have any underlying figures for us to review. No board member as far as I know was asked to attend any of the meetings between staff and consultants to generate these numbers. When we have a budget meeting to plan a budget for the following year, it’s a dedicated meeting that covers all figures in detail that takes us some time to review. I don’t see this happening today with this proposal to increase rates by 25%.
I represent our board on the investment advisory committee that meets several times a year to in detail review investment advice given by experts. Those experts are very cautious to say that their advice reflects on the current and a six month outlook. It’s hard to predict the future.
I would suggest that we consider raising our rates once by 10% to cover our operation out for one year. At the 2024 budget meeting, the board can then review the current economic situation and our operation figures in detail. If at that time a further rate increase is deemed necessary, we can address it then. I will not vote to increase our rates by 25% today as currently proposed.
I am pleased to say that the current board seems to agree to take a cautious approach to any rate increase. So, we will wait and see what the next staff proposal to the board will look like at the next board meeting.
Stay tuned.
Rick
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