Friday, September 5, 2014

Take the Fate of the PSB out of the Hands of City Council

[As a follow-up to yesterday's blog, I am publishing this op-ed piece written by Dr. Rick Bonart. Rick served on the PSB from 2009 until 2013 when City Council voted him off that Board. Emma Acosta led the despicable charge. David Crowder wrote an excellent piece in the El Paso Inc. regarding the ouster of someone who truly did put the "Public" back in the "Public Service Board".]

As the former citizen advocate from the Public Service Board, I want to comment on El Paso City Council's latest actions regarding the El Paso Water Utilities/Public Service Board - adding a new franchise fee and again proposing to eliminate the Public Service Board. These are horrible ideas.

It has only been a few years since former Mayor Cook convened a blue ribbon committee to review these very issues. The committee recommended that City taxes should not subsidize water rates, nor should water rates subsidize the city's taxes. Follow up studies were conducted and verified that the economic arrangement where the PSB already pays the City ten percent of its revenue is fair and comparable to other cities throughout the region. They also concluded that the PSB creates value for the City!

Ultimately, what’s in the best interest of our community is a sustainable, low cost, supply of water. Availability of water will be this region’s ultimate economic driver giving El Paso an edge in attracting new growth.  The citizens of El Paso have enjoyed low water rates and a reliable supply thanks to the policies of the PSB.
City Council’s meddling and undermining the PSB is bad policy. The PSB was established to set rates and policies to protect our precious water resource without political influence. The new franchise fee usurps that principle. It sets the bad precedence of City Council dictating how the PSB handles utility business.

Ironically, certain members of City Council were successful in decreasing Electric Company rates by arguing how harmful high utility rates are to the local economy.  This new fee is nothing more than a back door tax that increases a utility bill.  The franchise fee will be tacked onto water bills; but proceeds will go toward paying for city projects.  By so doing, what you pay for will be more obscure. From water projects to quality of life bonds, it's important that citizens understand the true cost of the projects they vote for. 

This new fee on business will be totally regressive in two ways. First, because it's a set fee per entity, a small mom and pop operation will pay the same fee as a huge corporate entity. Second, it's not tied to consumption. Currently as with your electric bill, consumers have control over the size of their bill by limiting consumption. Tiered water rates have been the most effective conservation measure initiated by the water utility. This new fee removes that discretion.

So why would City Council attempt such an awkward solution for such a relatively small (less than half a percent) shortfall? Surely 3 million in savings could be trimmed from an 800 million dollar budget. The answer is simple. It’s a first step. Once instituted fees and taxes never expire, rather they perpetually increase. This fee is only for non-residential customers, however it doesn’t require a crystal ball to realize residential customers will be ”fair game” and tapped to balanced the next  budget shortfall.

Unfortunately, Council’s assaults on the PSB has become an annual event. Members of City Council threaten to increase the PSB payments to the City, take over and sell off PSB land holdings, add fees, or, as with Representative Acosta’s latest suggestion, dissolve the PSB altogether.

City Council should keep water rates and city fees separate, support an independent Public Service Board, and act to repeal the franchise fee. I’d like to propose a Charter Amendment to require that the dissolution of the Public Service Board rest in the hands of the voters and not City Council. 

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