FLIP-FLOP: HIDDEN TAX INCREASE FOR RESIDENTS?

It’s March. Tax time.
I don’t know about you but I expect city leaders to use local tax revenue to, among other things, maintain city roads and infrastructure, including the city’s water lines.
As far as I’m concerned, that’s what local tax money is supposed to be used for.

The City’ Water Lines

The city has a long-standing agreement with the Cleveland Water Department (CWD): the city owns the water lines but the CWD fixes them when they break.

You might be surprised to learn that city-owned water lines are an important asset that is counted for purposes of determining the city’s net worth. That net worth directly impacts the city’s ability to borrow money and the (currently quite favorable) rate it pays to fund major improvement projects.

In an October 8, 2010 blog post I wrote about a new program launched by the CWD. (http://highlandheightsohiohappenings.blogspot.com/2010/10/grants-and-enticements.html)

The pitch the CWD made: We will replace your water lines at no cost to you…..for free!
All you have to do is irrevocably surrender a city asset (deed over the water lines to the CWD) and agree to a 50/50 income tax split whenever a Cleveland company relocates to your city.

Sounds like quite a deal, doesn’t it?

Maybe one that’s too good to be true.

Back then the CWD representative admitted that the CWD couldn’t guarantee when our city’s water lines would actually be replaced because the program has a limited annual budget and other participating cities’ water lines are much older and in worse shape than ours.

The rep also hemmed and hawed when asked how, exactly, the CWD was going to come up the dough to back up the deal. After all, replacing aging water lines is a very expensive proposition.

Council never got a straight answer on that point.

Back in 2010 Councilman Bob Mastrangelo seemed to be the only fish willing to bite.

My how times have changed.

One item on last Tuesday’s Committee of the Whole agenda: “Waterlines”

 Law Director Tim Paluf reported that he was reviewing, “a service utility agreement and transfer of asset agreement and new service agreement with the City of Cleveland Water Department”.

Now, apparently, all the fish are biting.

Engineer Brian Mader noted that some other cities that his firm services had signed up for the program and that last year the program paid for $15 million worth of replacement work….a figure that sounds big but (I’m guessing) translates to only 5 or so big replacement projects….total…throughout all of Cuyahoga County.

Mader commented:

“This is a means to have someone else pay for (replacing our water mains)”.

Well not really.

Perhaps without realizing it Mader eventually zeroed in on the truth of the situation. He noted that currently the CWD is funding the program from the rates it charges CWD customers and:

“As (the CWD) invests more in infrastructure replacement they are going to raise rates.”

NO DUH.

It’s not like we aren’t already paying a lot in water fees.

A story by James F. McCarty in the March 3rd Plain Dealer reported that:
“Greater Cleveland has the highest water and sewer rates of the six largest cities in the Great Lakes region…..The rates have more than doubled over the past decade, to an average of $1,317 a year for a family of four, utility officials said. For some, the increase has been an onerous expense that’s difficult to afford.”   http://www.cleveland.com/metro/2019/02/why-have-cleveland-area-water-sewer-bills-doubled-in-a-decade.html

But I’m not just thinking about how much we currently pay to the CWD.

 I think, if the City signs onto this program, things are going to get much worse for Highland Heights taxpayers.

I anticipate that someday---maybe soon---consumers who live in cities who haven’t signed onto the voluntary program and who still take responsibility for their own water lines will revolt against paying the tab for replacing water lines in cities that have turned over their water lines to the CWD. It’s a question of fairness. 

Ultimately the only solution will be for the CWD to split its customers into two groups: residents who live in cities who have signed onto the program and residents in cities who haven’t.  

It seems inevitable that residents in cities who sign up for CWD’s “free” water line replacement program will end up paying for that alleged “freebie” through both the loss of a city asset and significant new infrastructure replacement fees added to their water bills.

As the saying goes: You don’t get something for nothing.

My impression in 2010…..and my impression still….is that the CWD’s pitch is an illusion.

The CWD is attempting to obtain financial leverage over cities by making grand promises about providing freebie water line replacements throughout the county….an astronomically expensive freebie that the CWD doesn’t currently have the capacity to pay for…figuring that, in the end, it will be able to force you and me, as program participant residents, to pay for it.
I guess that’s what they call “regionalism”.

Bottom line the CWD “no-cost” water line replacement program strikes me as nothing less than a hidden tax increase for Highland Heights taxpayers.

Why do I say that?

Last Tuesday there was no discussion of giving Highland Heights residents a tax cut if the city rids itself of the cost of maintaining its water lines.

That means if Council signs off on the CWD program, city taxpayers will continue paying the same level of local taxes and pay much higher water fees on top of that to take care of something their local taxes used to pay for.

Residents will be left to hope that some day the extra expense will pay off, the city’s number will come up and the CWD will eventually make good on its promise to take care of the city’s water lines……like the city used to.

Sounds like a super "free" deal……right?