Monday, March 12, 2018
Kansas City Tax Fighters Warn Of More Massive Water Rate Spikes
Here's a worthwhile round-up of rising water rates and City Hall efforts to obfuscate the costs while asking for even more taxpayer cash. Take a peek:
2018 Water Rate Increase
Kansas City, MO. Residents water rates have more than doubled since 2009. Our city government is planning to raise them even higher beginning May 1, 2018. All previous increases were sold as the city needing to comply with the EPA mandate; the same mandate that the city has ignored for 30 years. Unfortunately, the money generated by this NEW 2018 rate increase will not go to the water department but rather into the city’s general fund to be used however they see fit.
The City’s water department is not really a department of the city. It is an enterprise fund-like the Airport-wholly owned by the city but (supposedly) run separately from the city. Water Services is actually 3 utilities (water, waste water, and storm water) managed as one. Money generated within the enterprise fund(s) has to stay within that fund-by state law.
Missouri state law does not allow city owned enterprise funds to be taxed. State statute prohibits KCMO from taxing the water department; instead, KCMO has instituted something resembling a tax but called something else in this case it’s called a: Payment In Lieu Of Taxes (PILOT). Proposed Ordinances 180137 and 180138 seek to raise the water and sewer rates of the KCMO residential and commercial ratepayers another 4%. This rate increase would go to the city’s general fund- not stay within the water utility as is proscribed by law.
In addition to this rate increase we found out that the city has been borrowing money from the water department.
In 2017 KCMO borrowed $10,000,000 from the water department to pay back the $10,000,000 it borrowed from the aviation department (but couldn’t pay back) in 2012. The city also charges the Water Department an exorbitant "shared services fee" for Human Resources and Administrative Services. This enormous fee of $14,000,000 equates to about $16,000 per water department employee. This hefty "shared services” fee gets charged back to the citizens of Kansas City through higher water rates.
We also learned that it cost the Water Utility $47,000,000 to move the water, sewer, and storm water lines for the 2-mile downtown streetcar line. All the KCMO residential and commercial water users will be footing this $47,000,000 bill for the next 23 years. The upcoming 4-mile streetcar expansion will require moving all water utility lines on Main Street and cost all KCMO residential and commercial users between $100,000,000-$150,000,000 for the next 23 years.
We believe it is time for the city to stop using the water utility as its personal slush fund. Water bills are high enough. The council should: Vote no on the above ordinances, tell the water department to lower the "shared services" fee and stop the water department from charging all the city residents for streetcar improvements. Streetcar expansion costs should be charged to those living within the TDD.
Please call and email your councilmembers and let them know.