Wednesday, January 19, 2011

Oregon PUC should investigate Bend

The state's Public Utilities Commission is supposed to shield Oregon residents from outrageous increases in water and power rates.

Well, it needs to stop the city of Bend from extorting exorbitant increases for water and sewer services from its residents.

Recently, the local paper caught up with the story I've written about before: that the city has jacked up water and sewer rates at unprecedented levels - far greater than the rate of inflation.

Check out these numbers:

In 2010, water rates increased by 8.3 percent while sewer rates jumped 14.5 percent. This added $7 to the average monthly bill.

The rate of inflation last year was 1.6 percent.

For the past decade, Bend routinely raised water and sewer rates at a minimum of double the inflation rate.

For water this past decade, rates increased in percent by: 7, 7.8, 7.8, 7.8, 4.8, 5, 5.5, 8.3, 8.3 and 7.1 for 2011. For the average user, the net increase in dollars was: $19.64 per month.

For sewer this past decade, the rates increase by percent were: 4.5, 3.3, 6, 6, 3, 6, 6, 14.5, 14.5 and 8.75 for 2011. Again, for the average user, the net increase in dollars was: $17.95 per month.

Together, water and sewer rates have escalated this past decade by $37.59 per month.

In addition, the city assesses a $48 annual fee for storm drains. Builders and developers, by the way, pay no impact fee for storm drains.

The city pushed rates so high so fast that it needed to create a fund to help people who couldn't pay their water and sewer bills.

Of course, all this came about because builders and developers paid "impact fees" (known here as system development charges) far below what that they should've been.

The consequences were terrible. The city is now $20 million in debt, with no way of ever paying for any improvements to roads, water, sewers or storm drains aside from bonds approved by voters.

Also, with artificially low impact fees, Bend became grossly overbuilt with new homes, many of which are now empty. And, higher impact fees would've modulated the building frenzy. Construction accounted for more than 30 percent of our economy when it should've been around 10 percent.

Consequently, our local economy suffered more than the rest of Oregon and most of the country. Our unemployment/underemployment rate is close to 20 percent.

This week, the city caved to developers' demands by not making them pay for infrastructure improvements. Whatever they pay per household (around $13,000 and those fees are now deferred), are then given back to developers.

In other words, ratepayers are subsidizing developers and we're not seeing any improvements to our infrastructure.

The state must put a stop to this.

Please, PUC, roll back these extreme rate increases.

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