Monday, May 23, 2011

City Council approves 5-year water rate increase plan

Cleveland City Council voted this evening 10 Yes; 8 No; 1 absent approving a Division of Water rate increase plan for the next 5-years. I voted NO, not because I don't agree on the need for an increase, but rather on a vote of no confidence in the existing executive/admin management of the Division.

Vote Summary -- YES (10): Sweeney, Pruitt, K. Johnson, Cleveland, Mitchell, Miller, Brancatelli, Kelley, Zone, Westbrook. NO (8): Dow, J. Johnson, Conwell, Polensek, Cummins, Brady, Keane. ABSENT (1): Cimperman.

For a detailed report on the Division of Water that includes the Rate Study information see:
City of Cleveland – Division of Water Comprehensive Financial Plan Report, March 2011

Reasons opposed to the water rate increase legislation --
  1. Poor Executive & Administrative Management
    • Lack of confidence in the current leadership and management of the Division of Water.  There’s been no one held accountable for the poor Administrative and Fiscal management of the Division.  The poor management of the division has overshadowed the strong and successful management of the Division’s capital improvement projects, water operations and quality of our water.   The lack of accountability jeopardizes credibility of the entire system.
    • The Division of Water’s accounts receivable balances have seen double digit increases since 2007.  The 2010 accounts receivable position was not presented to Council until just this month and equals some $75 million.  Of this balance more than 50% of it is past due 6-months or longer, and the Division has not made any major write-offs for un-collectable accounts.
    • Due to the (management) problems in billing and customer service, Council’s Leadership made a decision in 2010 to not entertain a discussion about the Division’s need for a water rate increase.  There was a draft water rate study completed last year that provided much of the same information we’ve been informed of since March 2011.
    • The full City Council should have been notified sooner of the Division’s financing position and need for a rate increase.  The increase was budgeted in the 2011 Mayor’s estimate in February 2011, and assumed a passage of the increase by July 1, 2011.
    • Disappointed that no permanent Commissioner has been hired since departure of Commissioner Nielson in December, 2010 (5-months!).
  2. No Public Process
    • There have been no public meetings sponsored by the Division of Water in Cleveland to explain need and rational for the proposed 5-year increases or the steps being taken to improve the management of the division.
  3. In-sufficient planning to buffer impact of increases on most vulnerable customer.
    • No immediate plans to introduce budget billing/payments for people who have been asking for monthly billing because their quarterly bills are getting too high.
Other observations
  1. Satisfied that Council negotiated 50% reductions in rate increase for our most vulnerable customers who are eligible for Homestead rate.
  2. Calls for a one or two year authorization for increases with additional pending performance review were not considered. 
Posted meetings regarding the proposed rate increases -- Meeting dates:

  • Wednesday, May 25, 6:00-8:00 p.m.   Independence Civic Center, 6363 Selig Drive, Independence 44131
  • Thursday, May 26, 7:00-8:00 p.m.  Harvard Community Services Center, 18240 Harvard Avenue, Cleveland44128