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Wednesday, September 16, 2015

Portsmouth Residents Pay for "Math Errors" and Borrowed Funds -- More Fee Increases

According to Portsmouth City Manager Derek Allen, the city is still struggling to get "correct and accurate bills (water and sewer charges) out." Allen said a math error was discovered, but "it had nothing to do with what happened." I'm not sure exactly how inaccurate division and miscalculation did and didn't cause the billing error, but I'll let the City Manager explain ...

"Allen said, when the bills went out they contained a monthly service charge.

“'If you didn’t use any water or didn’t have any sewer, you still had a $21 quarterly charge for water and a $21 quarterly charge for sewer. When we went to monthly that had to be divided by three in order for us not to raise everyone’s bills. So if you take the $21 and you divide it by three, it’s $7 a month for water and $7 a month for sewer. So there’s no rate change.'

"Allen said those doing the billing had divided that number by three and at the same time divided the consumption rate by three.

“'Just because we went from quarterly billing to monthly billing, it shouldn’t affect what I charge for 1,000 gallons of water,” Allen said. 'And what we did was we lowered it from $3 and something down to $1.26 per thousand. So that’s what happened there.'”

(Frank Lewis. "Portsmouth City Manager explains the utility billing snafus."
Portsmouth Daily Times. September 15, 2015.)
Now, as I've mentioned before, everyone knows "math is hard" and far be it from me to understand the complexities of elementary long division. But, something else about the city's conversion to monthly billing must be presenting a real brain buster to those at city hall. And, I wonder if the following information explains the confusion:

Allen said last month the city had "more issues.” He explained:

"It may be a shocker to some people but since 2007 the Sewer Fund has had a deficit condition. And, oh, by the way we signed a Consent Order in 2013 to do millions of dollars of work, and we’ve done it and we borrowed that money and in November or December the first payment comes due and we don’t have that money.”

Allen concluded that “no one should be shocked that the rates have to go up.”

Therefore, I'm assuming that the miscalculation during the conversion to monthly billing is just one part of much higher water and sewer bills in the city. Residents pay and pay.

And ...

Citizens have already suffered many increases in their water and sewer bills during the last decade. According to the Times, here are recent Portsmouth water and sewer rate increases:
  • 2004 - Water 5.7% - Sewer 5.9%
  • 2005 - Water 5.6% - Sewer no increase
  • 2006 - Water 9.1% - Sewer no increase
  • 2007 - Water 3.4% - Sewer 3.5%
  • 2008 - Water 3.5% - Sewer 3.5%
  • 2009 - Water no increase - Sewer 3.0%
  • 2010 - Water 8.0% - Sewer 9.0%
  • 2012 - Water no increase - Sewer 9.0%
  • 2013 - Water 3.0% - Sewer 3.0%
 (Frank Lewis. "Portsmouth water and sewer rates increase."  
Portsmouth Daily Times. July 24, 2013)
And ...

They have already been told sanitation rates are going up again because the city discovered they will be on the hook to the Environmental Protection Agency for an annual fee estimated to be between $75,000 and $85,000.

And ...

They have already responded to the desperate cries of the need for more income tax increases to "keep the City government afloat" -- Portsmouth passed a 0.6 percent income tax increase in 2011 and a 0.5 percent in 2015.

What is going on? First Ward City Councilman Kevin W. Johnson, speaking to members of the Scioto County Health Coalition on November 14 of this year said Portsmouth City Manager Derek Allen continues to find things in the city that “are absolutely broken.”

“'I hate to say it but that reflects years of mismanagement, ignoring situations; ignoring problems; ignoring their employee input or employee nothing,' Johnson said. 'I hate to say it that way but it’s just the way, if you don’t have management, employees tend to, "hey, I’m not doing anything." He’s facing some major issues. A lot of them come down to financial issues. We simply cannot afford to pay for what needs to be done.'”

(Frank Lewis. "Johnson: city suffered from mismanagement."  
Portsmouth Daily Times. November 19, 2014)

The "buck" is passed, passed again, and passed again until it stops with the citizens of Portsmouth. People continue to pay more and more for costs and miscues of City Hall. People are tired of opening their meager pocketbooks every time Council cries "Wolf!"

Before the passage of the last income tax increase, this is the question I posed:  

"If a 0.6 percent income tax increase in 2011 has not stopped losses to the tune of $1,405,000 per year to the city budget -- 2012, 2013, 2014, and a projected 2015 -- then why is another increase of 0.5 percent going to have any lasting effect?"

I believe the question is more pertinent today than ever.

Someone must have the ability to do long-range planning that prevents these never-ending financial woes from occurring. I wonder how many problems are the result of miscalculations, of insufficient understandings, and of unfair manipulation? My guess is that all three causes of headaches constantly plague city government. Vision and transparency are not proven attributes at City Hall. I think one small math error cannot explain the money flow.
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