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Fairness in rates can be achieved through reasonable, consistent application of policy

Posted: February 4, 2013 - 1:41pm

The City Water/Sewer Rate Task Force is promoting a proposal that is not only unfair, it is unreasonable. It targets a small group that has little representation. The proposal is being pushed through to the Homer City Council level without regard for the facts and testimony, and completely ignores the elephant in the room — our water and sewer rates in Homer are exorbitant, three to four times that of other communities in the state.   

 This proposal seeks to double the sewer rates for users on the Spit. I have expended significant time analyzing the task force documents. It was not difficult to determine by their own projections, assumptions and methodologies that the Spit users are, in fact, already paying their relative share of expenses at the current rates. I have testified to this effect citing the volumes, revenue requirements and the relative share attributable to the Spit.   

 The task force champions the “commodity-pay for what you use” rate theme and the “cost-causer” methodology. However, these values are being applied  in an inconsistent  manner designed to  support a pre-ordained outcome, or initial hypothesis.

For instance, the task force segregates lift stations on the Spit as a cost causer, but does not assess non-Spit lift stations. By their own admission, the task force is not informed regarding the costs of any of the lift stations.

Furthermore, if one accepts this glaring flaw, one would still be faced with the fact that the proposed doubling of Spit sewer rates still far exceeds the revenue requirement associated with Spit services. 

Therefore,  one must then suspend the very commodity rate methodology that has dominated the rhetoric from the Task Force, and accept that “consistent” and “reasonable” are terms to be disregarded from consideration as to Spit sewer rates.  

  The task force is in the dubious position of having expended significant time and resources developing a plan that is fundamentally flawed. It happens to all of us. One’s natural immediate response is to defend the plan and overlook the faults in the rhetoric.

To their credit, there are members of the task force who are trying to highlight the errors and I am hopeful that members of the city council will provide further guidance to correct this course.

Our city needs effective solutions to its budget challenge, let’s focus energy on developing well-rounded solutions not initiating or defending proposals to target isolated groups.  

The Homer News editorial last week characterized fairness as both “life is not fair” and “about as likely to happen as a week-long run of rainless 80-degree days next July.”  We should, at a minimum, attempt  to achieve “fairness” which is a standard underpinning to rate payer analysis, and settle at reasonable and consistent if we must.

The current rate structure proposal is largely shifting a cost from one group to another small group that similarly does not have significant representation. If the city does not elect the option, like businesses and households, to adjust their overhead, then the additional revenue burden they seek should be spread over the population of users. 

 I do not know if the right answer is for the general public to require the city to reduce overhead as many of us need to do, or to apply increased cost burden over the population of users. That is a question that needs to be vetted by all city residents. 

I do know that avoiding the difficult questions by dumping costs on the apartment owners or Spit users or seasonal residents or charter boat owners because they might not be able to garner sufficient voice is destructive.

I know many fair-minded residents in this “Cosmic Hamlet by the Sea,” and I remain confident that “we the people” can at least approach fairness, and I am certain that reasonable and consistent policy is absolutely achievable.   

Mike Dye is a Homer resident and chief executive officer of Land’s End Acquisition Corporation.   

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