IRBust - Part 5

SEWER/SOLID WASTE RATE JACKING

MILLION DOLLAR QUESTION: Was this commission aware of unauthorized loans to the Sewer and Solid Waste Funds when they tried to ram a rate increase through some weeks back?

Had the increase sailed through unopposed, the influx of additional revenue would have “masked” the problem awhile longer and possibly kept the public from learning the truth. With the public now in-the-know, the commission faces certain pressure to shelve any nonessential spending items—including projects certain commissioners support—projects that drew votes for them at election time.

Former IRB Mayor/Commissioner Ed Piniero effectively stopped the rate increase in its tracks by pointing out that proper notice, as required by law, wasn’t given to the public. Many of us in attendance at the public hearing that evening thought it odd for the commission to be in “such a rush” as to ignore the advice of the City Attorney, who felt Piniero's argument had merit.

Understand please that NO PREVIOUS COMMISSION was ever made aware that the enterprise fund balances were upside down such that loans from the general fund were required to prop them up. This is the FIRST and ONLY commission to which this information has ever been revealed. In essence, while past commissioners and citizens alike thought everything was rosy, the City was working its way to the verge of bellyupski. Previous budgets, audits reports, etc. show in-the-black balances for both the Sewer and Solid Waste Funds, evidently due to the influx of cash from hidden loans “siphoned,” without permission, from our ad valorem tax monies.

The joke is that if the proposed rate increase had passed some weeks back, we’d probably be facing another one almost immediately. The Sewer Fund is actually in worse shape than the Solid Waste Fund; however, the increase the commission had on the table asked for a higher percentage of increase in the solid waste rates.

Roll the clock forward to CPA Robert Garner’s report of the bad news. Mayor Johnson expressed disgust with himself for not having gone ahead just “done something.” His self-disgust pales by comparison to the aggravation that many citizens feel about a commission that sees throwing money at a problem to be the best solution.

The sentiments of many outspoken residents have been somewhat mischaracterized. Citizens don’t object to paying an increase; they object loudly, however, to footing the bill for an increase that no one seems to be able to explain. Citizens were told that the fund balances were upside down; yet all budgets, audits, reports—in fact everything ever released to the public—contradicts that statement.

As one astute resident (Sonny), who obviously spent some time reviewing the budget, commented on an earlier blog entry:

“This morning I labored through the budget…..I may be oversimplifying, but am I correct with understanding that in the year 2005, the city’s General Fund Balance Ratio (actual) was 33.5%, and in 2006, the following year, was 30%? I read this as the city reserves, and what we had in the bank “for a rainy day” or emergencies. That would have been a lot of money tucked away. I also reviewed the Sewer and Solid Waste Fund….Reviewing these funds showed respectable Fund Balance Ratios for the same years. The actual reserve for the Sewer Fund in 2005 was respectably 26.8% and dropped to 6.4% in 2006. I’m not sure what the drop in fund balance accounted for, it did not say. I would hope to take care of an emergency in town or unanticipated maintenance, but that is just a guess. The Solid Waste Fund Balance Ratio actual in 2005 was a healthy 25% and dropped to 18.5% in 2006, still a respectable reserve. What happened between then and now?"

With reasons that make sense, our residents will pay the freight. So far, however, the explanations simply don’t git 'er done.

It’s already been established that previous commissions going back six years were not aware of the existence of the recently disclosed loans. WHAT did THIS COMMISSION know and WHEN?