Concerns about water rates
Last week, Judy Woolley wrote an excellent article laying out the foundation of the current proposed Water and Sewer Ordinance from the Town of Plains, and how that would affect her rental property.
Without exception, that unfortunate scenario will be duplicated by every owner of rental property, and subsequently, by every tenant who rents. The augmented cost of business, usually levied by increased cost of utilities and/or tax burden to the business owner (or landlord) is always passed on to the next guy…
In short, the Plains Water Board proposes that each rental property with only one water hook up, be charged a monthly water and sewer base rate commensurate to the number of electric meters for each rental unit. If you own a 4-plex, your bill just quadrupled. The Water Board contends that the tenants in, and owners of, multi-family housing are getting away with ‘theft’. As a Property Manager who pays water bills for approximately 14+ properties each month, I have the unique opportunity to compare rates charged and paid to these properties (information also available to the Water Board). As the current base rate is charged for 4000 gallons and usage above the 4000 is charged at a metered rate, and the sewer rate is proportionate to that usage- I can assure all that there is no theft happening on the part of rental property owners and tenants at least. The current system allows the city to be reimbursed for actual usage, and it reflects accurately, the ebbs and flows of tenant occupancy.
Charging a base rate for each unit, regardless if there is a hook up, allows the city to show they have more water hook ups than they actually do. It creates a new user base, which in turn, allows more revenue to be generated without instituting a direct rate increase for all users. Unfortunately, it creates a huge rate increase on rental property owners (and tenants). As insulting as that is to the pocket books of Plains’ residents, the Water Board has decided to now charge a full base rate for water and sewer even if you have requested the water to be shut off at your property. This cost just went from approximately $20- a month to $36-, for nothing. Can you imagine if the power and phone company charged like this? Once you sign on, you are signed on for life. Allowing the Water Board to initiate charges on something that doesn’t exist (water hook up) and charge for a utility not used, sets a dangerous precedent.
The city says they want to be able to predict their income; they don’t want it to fluctuate with the comings and goings of residents. Base rates are their ‘bread and butter.’ I have worked numerous jobs in my life, and now own a business, I sure wish the rest of the world could be as ‘predictable’ as the city would like their income to be, don’t you?
As bad as all this is, it’s not the worst of it. This ordinance was presented at the November Town Council meeting, they didn’t even read it aloud. And they voted, all in favor. In December, they read it aloud, there was a lot of public comment, none of it favorable, and thankfully, two council members changed their vote, but to no avail, the Ordinance passed. Believing this Ordinance was a done deal, and in the course of notifying owners of rental properties managed through my office, I discovered that the Water Board, and subsequently, the Council passed this Ordinance, possibly in violation of Montana Code. Specifically, Montana Code Annotated 69-7-111. The title of this code is Municipal rate hearing required- notice. And it states that ‘if the governing body of a municipality considers it advisable to regulate, establish, or change rates, charges or classifications imposed on its customers, it shall order a hearing to be held before it at a time and place specified.’. Notification shall be published in the paper, it shall be sent in writing to every rate payer and shall contain an estimate of the amount the average consumer’s bill will increase by, and a copy of the notification shall be sent to the Montana Consumer Counsel.
None of this occurred. In the course of the last 2 weeks, I have written to the City Council members and the mayor to notify them of this possible violation. The mayor and I visited last Thursday, and I very much appreciate the fact that he took the time and prerogative to meet with me. I also received a letter from the city’s attorney, Richard Gebhardt. Mr. Gebhardt expressed his opinion that the Council did not violate MCA 69-7-111. Rather, they were acting under the authority granted them in ‘editing’ an existing Ordinance. Mr. Gebhardt referred to MCA 69-7-101, which states that a municipality has the power and authority to regulate, establish, and change rates and classifications… Yes, they do, but this code does not suspend MCA 69-7-111, in that although the Council can change the rates, they still have to abide by the protocol for notification to all rate payers. Mr. Gebhardt indicated he also spoke with the Montana Rural Water Users Association regarding the process. In these last 2 weeks, I have communicated with an attorney, a member of the Public Service Commission, the Montana Consumer Counsel, and even a 2012 Gubernatorial Candidate. They all indicated that the Council needed to abide by the code and notify the public properly by conducting an open hearing process. Montana Code has been written based on case law and Legislative actions, not the advice of Associations. Ultimately, the law prevails.
Fortunately, it appears that the Council will re-start this process, now openly and legally and there will be a hearing at some future date/time. It is not my intention to suggest that Council members are conducting themselves in an illegal manner; perhaps they were unaware of the hearing process and its applicability to the Ordinance, I was not aware until I started talking to the appropriate people, and looking up the applicable codes for myself. However, attending the meetings that I have, and now reading the minutes from the past 5 months, I am concerned that it appears some Council members rely solely on the appearance of the public at their meetings to gauge how the public feels about a topic. While important, this should never be taken as a whole for the opinion of the citizens of this town. We are hard working, honest folks, who for the most part, struggle every month to pay our obligations. We hope by electing the representation we have, that they understand our situations and take it into consideration first. We hope that anytime the Council suggests an increase in the rates we must pay for a necessity such as water, that they do it because it is absolutely necessary. Not because the town dislikes having to adjust their budget and future predictions on income.