This communication is intended to set the record straight regarding comments I made in my April 4 report to the Madera City Council regarding water utility rates recently reported on in the Tribune’s Wednesday, June 6, edition.
As I did in a communication that appeared shortly after the above presentation and the Tribune’s subsequent reporting, I find it necessary to set the record straight and clarify what I did and did not state regarding City Water Utility Rates.
This is what the Tribune reported and attributed to me under its headline: “Recall Committee starts signature campaign “(Pages A1 and A3): “…. he determined it was the reluctance of past city councils to raise rates incrementally over the years that led to the sudden increase, and he predicted more increases to come ….”
Anyone who read my extensive report, consisting of several graphs and charts, should understand my 13-page document made no such assertion.
The report goes into great detail explaining how past City Councils failed to adequately increase Water Development Impact Fees (DIF) for nearly a 30-year period. I made only a passing reference that customer monthly water utility rates had not been increased in recent years even though labor and maintenance costs had dramatically grown over the past several years.
The question needs to be asked: “Did the Tribune writers read my report, and do they understand the difference between monthly customer Water Utility Rates (the issue that has stirred all the controversy) and Water Development Impact Fees?” Most citizens probably are not familiar with DIF and their “one-time” application to new building construction within the City and its estimated impact on the City’s infrastructure and water delivery system. However, my report provided great detail in explaining this and its potential impact on customer water rates if not properly managed. My point is that the two are distinctively different and the Tribune has confused the two in its reporting.
I also did not predict more customer utility rate increases to come. I stated that it would not be wise to decrease such rates in the short-run because of the need for revenues for capital improvements (improvements that should have significantly been funded with DIF).
While the Tribune is correct that I did conclude that management salaries and overhead administration were not the principal causes of the extremely high customer water rates, it failed to properly address the chief concerns I raised.
My April 4 report is lengthy; however, in reference to this matter it can be summarized with three (3) of several concluding points made in its “Summary and Conclusions” (Pages 12 and 13):
5. THIS FINDING IS NOT MEANT TO IMPLY THAT MADERA’S SYSTEM OF ALLOCATING COSTS IS COMPLETELY ACCURATE OR THAT MANAGEMENT SALARIES AND COMPENSATION SHOULD NOT BE EXAMINED. THAT EXAMINATION IS UNDER REVIEW (MANAGEMENT COMPENSATION STUDY REPORTED AT THE MARCH 21 COUNCIL MEETING).
6. THE CONCLUSION IS THAT THERE IS OVERWHELMING INFORMATION THAT INDICATES FOR POSSIBLY THREE DECADES CITY CUSTOMER WATER RATES HAVE SUBSIDIZED NEW GROWTH. PLAINLY STATED: THE LACK OF PROPERLY ADJUSTING DIF TO PAY FOR NECESSARY CAPITAL IMPROVEMENTS (WELLS, ETC.) NECESSITATED THE MORE RECENT CUSTOMER RATE INCREASES TO PAY FOR BACKLOGGED CAPITAL IMPROVEMENT NEEDS.
11. Development Impact Fees cannot be applied retroactively. Therefore, it would be unwise to lower Water Customer Rates in anticipation of “immediate” revenues from DIF from new growth. This is a slow process and dependent on a number of factors.
I appreciate the Tribune providing me the opportunity to set the record straight.
— Ron Manfredi,
Municipal Management Consultant,