Several years ago your water bill paid for more than just water. First off, the city was transferring about three quarters of a million dollars a year from the water fund to the general fund. They called it PILOT, and it was basically the city charging water customers for the property tax that the water department would have paid if were a separate, for profit company. Starting in 2005 when a significant rate increase was enacted, we started fighting for the elimination of “PILOT”. First off, it's a bit silly for the city to be charging itself property tax. At the time they tried to justify it by saying that the water department should be paying for services like police and fire protection. Didn't make much sense since at the time the water department paid for their own Lake and Park police department which not only handled issues at the lake but all the city parks. And without the water department what kind of fire protection could really be offered. The water department was already paying for regular services the city provide such as legal, engineering, and finance personnel, etc. through whats called cost allocation. For example, the water department pays a percentage of the city attorneys salary based on how much of the city attorneys time is spent dealing with water department issues in an average years. If it's 25%, then the water department pays 25% of the city attorneys salary. The process is repeated for the rest of the functions the water department uses and that money is paid into the general fund for the services the water department receives. In addition the water department should be paying franchise fees just like any other utility. This is to help pay for the maintenance of the right of ways that the water department uses just like the gas, electric, cable, and phone utilities do. Those two payments should cover any regular expenses the water department causes the city. We have made great progress and what most of you pay on your water and sewer bills actually pays for water and sewer services. Yes, the water bill still pays for stuff like the upkeep of the lake parks and the Pecan Creek Pavilion, but those have at least some connection to water, and they do bring in a little rental revenue. Still, we've made remarkable progress.
City staff put out a proposal at the budget workshop to take $2 million a year from the water and sewer capital funds and use it to fix our streets. I can sympathize. Our streets need lots of work, and at the current rate of spending we'll never catch up. We do need to get on top of this. Still, since 2005 every council has agreed that the water fund and the water bill should be going to furnish water to the customers and nothing else. Water here is a scarce, precious commodity. It is so necessary that the sunset was removed from the 4B sales tax so that the majority of that ½ cent money could be used to subsidize the development of long term water sources. Now staff has suggested taking money that you are paying for water and spending it on roads. Mr. Morrison has asked staff in the past to rebate any excess money in all the water funds back to the customers and was told by staff that it was essential to keep the capital fund money in the fund because it would be needed to pay for identified capital needs and possible emergency needs. If the needs are so big and urgent we can't give it back to the customers then we can't justify using it to fix roads.
We need to fix our roads. There is no doubt about that. There are lots of options such as a street maintenance sales tax, cutting more unnecessary services, etc.. Taking money from our water customers is not the way to do it.