GUEST COMMENTARY
Measure K is irresponsible
Published: Thursday, Aug 21, 2008
By MARTIN LEARN AND GERALD MOORE
Bryant Moynihan’s water and sewer rate rollback initiative now has its letter for the November election. It will be Measure K. That’s K as in “kooky.”
H.L. Mencken once said, “For every complex problem, there is a solution that is simple, neat and wrong.” That describes Measure K perfectly. Who knew we had students of Mencken here in Petaluma?
Frustration with rising utility rates is understandable. But Measure K’s meat-ax approach is the wrong response. Measure K would impair water quality and would force the city to choose between compromising public safety or declaring bankruptcy. And there would be no obvious path out of bankruptcy. It’s that bad.
Measure K would roll back both water and sewer rates to 2006 levels and cap future rate increases — forever — to the Consumer Price Index.
Even if the water utility canceled all capital projects — including replacing old, degraded pipes — Measure K would soon have the water utility operating at a loss of over $1 million annually. Petaluma’s biggest water expense is purchasing water from the Sonoma County Water Agency, which provides almost all of Petaluma’s water. The wholesale price has, in recent years, been increasing faster than the CPI. That’s unpleasant, but there isn’t much the city can do about it. So Measure K could force the city to choose between not paying its water bill or taking funds from police, fire and parks. That isn’t a scare tactic. It’s the truth.
Measure K’s impact on the sewer utility would be even worse. The new sewer plant is 90 percent complete, replacing the old 1930s plant. It’s like your family replacing a refrigerator after 70 years. The new plant will serve the community for 50 to 100 years with an environmentally friendly technology that exceeds standards for treating sewage. Its design went through rigorous value engineering to reduce costs. It’s a great accomplishment.
As an aside, Mr. Moynihan likes to point to opportunities many years ago to build a new sewer plant more cheaply. There were such opportunities, but those designs would not have met modern discharge requirements the way the plant actually under construction will. If Petaluma had built a new plant earlier, we would now be faced with very costly upgrades. That’s the situation Santa Rosa is now in. We would not want to trade places with them.
But the money to build the new sewer plant has largely been spent. The only issue now is how to repay the loan. The initiative proponents wishfully hope that Petaluma can just stiff the state of California on the $125 million borrowed for the plant. The state has asserted that it will hold the city responsible for repaying the loan, and possibly will even accelerate the loan and demand immediate repayment of the entire $125 million. The best-case scenario if Measure K passes would be that the state does not accelerate the loan, but that still creates a $7 million annual deficit for the sewer utility. This could force the city to declare bankruptcy.
If Measure K passes and the state chooses to accelerate the loan, the situation gets even worse. The state loan is at an extremely favorable interest rate — 2.4 percent — and replacing it with other financing would cost an extra $60 million over time. A bankruptcy judge would have the power to overturn the passage of Measure K. So one possible end result of Measure K passing would be even higher rates due to losing the state loan.
Almost three-quarters of Petaluma’s general fund budget supports police, fire and parks. Petaluma would face major cuts in important services if Measure K passes. Petaluma’s budget is already lean: Petaluma’s general fund budget per capita is $704, compared to $819 in Santa Rosa and $1,039 in San Rafael. Further cuts would be harmful.
We encourage Petaluma residents to vote no on irresponsible Measure K.
(Martin Learn is president of the Petaluma Firefighters Association. Gerald Moore is chair of the Petaluma Wetlands Alliance.)
