Commentary

Commentary
By Jack Gurner

Are Water Valley residents subsidizing local industry by helping pay for the water they use?

It’s a convoluted issue that has intrigued me for the past seven years, ever since aldermen from the previous administration first voted to raise water rates across the board in March 2008. Then they did a flip-flop on the issue at the end of that year, lowering industrial rates to the old level.

Although I was new to covering the board and hadn’t learned the nuances of politics in the city, I knew something was going on to make them all change their minds and parrot the same spiel about the factories shutting down and jobs being lost because of the increase in water and sewer rates.

The reason water rates came up in the first place was because America’s drinking water infrastructure had reached the “age of replacement.” Water and Sewer Department Manager Morris Surrette appeared before aldermen in late 2007 and explained that Water Valley, like most all other U.S. cities, is going to have to replace worn out drinking water pipe and associated structures.

The replacement costs/value of water mains was about $6300 per household in 2007 dollars. “Ultimately the rate paying public will have to finance the replacement of the nation’s drinking water structure,” Morris added.

Three months later at the March 2008 board meeting, aldermen voted to amend the Water Resources Management Ordinance to raise outdated water rates. The reason for the increase, they said, was not only to cover the costs associated with revamping the worn out system, but also to comply with new government regulatory standards that would require stricter monitoring of the system 24 hours a day.

The amendments also eliminated the descending rate for industrial uses that lowered the cost of 1,000 gallons of water to 30 cents. The concern with the descending rates was that those who tax the system most ultimately ended up paying less. At the time it cost the city $.59 to pump 1000 gallons of water to the surface  and $1.36 to pump it up and deliver it to the customer.

Those figures came from a water rate survey done in 2008 by the Mississippi Rural Water Association, a recognized legal authority on water rates. What those figures don’t include was any additional cushion for future maintenance, which added up to about $1.63 per thousand gallons.

Then, at the December 2008 board meeting, Phillip Tallant, who was then plant manager for Water Valley Poultry, LLC, asked aldermen for help, complaining that the water bill for the poultry processor had more than doubled from March to April.

To make a long story a little shorter, aldermen suddenly were talking about the poultry plant closing and jobs being lost. But, they were all for the increase just months before. Now they were all for lowering the industrial rates…not the residential rates…just the industrial.

What had happened in the past few weeks to change their minds? According to two of the aldermen, they had received a call from a former city official warning them of the dire consequences of raising the industrial rate.

Even after having it explained to them that it was against the law to give away city services, they all were insisting on amending the amendment to get those industrial rates back down to below costs. One alderman said that all he was concerned about was losing jobs and business for the city. I couldn’t help but think that if it was costing the city money to provide water, losing their business would mean it would cost us less.

And, if a local industry wasn’t making enough money without help from the taxpayers, maybe it was time to look at their business model. While our state legislators provide a number of tax breaks and other incentives for industry, they don’t allow donations of city services.

There didn’t seem to be nearly the concern about others who complained to aldermen about the new, higher rates.  Buster Jackson of the Jeff Davis Rural Water Association said that the new rate structure would more than double what they had been paying. “This massive rate increase will work a hardship on many of our water users. Many live on fixed incomes.” Jackson said. “If we can’t get this rate reduced, we have no alternative but to pass it on to our water users.”

One alderman commented that if the city charged less, the residents would be subsidizing the Jeff David Water Associa-tion. “The more they use the less they pay per gallon,” she added. “It is totally out of date because it does not encourage conservation.”

So, lower rates for industry, but not for regular folks who use water.

Like I said, it is a convoluted issue.

Next I’ll look at how today’s rates compare with the old and who pays for the ever-increasing expense of chemically treating our wastewater.

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