May 25 2014

OPINION: Former Mayor States No Need for More Sewer Taxes

The City has enough money to pay for sewers.

I listened with interest to the Piedmont City Council’s discussion on financing future sewer projects at its May 19th meeting.  In response to the Council’s request for community input, I have the following comments:

The Council should explain why voters were asked to pass an $11 million tax for sewer repairs a little over two years ago, and after that measure failed, are now considering a $1.2 million tax measure to complete the very same work.  This is a significant issue and needs to be addressed, particularly if the Council chooses to place a tax on the November ballot.

The Budget Advisory and Financial Planning Committee’s recommendation is that the Sewer Fund needs a one-time infusion of cash of at least $1,000,000 over the next 3 years to maintain a prudent Sewer Fund balance.  The Fund would then have the seed money to proceed with replacing all the remaining substandard sewer lines during the next 20 years.  In my judgment, the Council should fund this request out of current general fund revenues. Instead, the Council is considering seeking passage of a tax measure which would increase most homeowners’ property taxes from $120 to $150 a year for 3 years or by adding a surcharge to the already steep real estate transfer tax.

The City has an annual general fund budget of approximately $22 million.  Allocating two percent a year to this project for three years would produce over $1.3 million.  As of June 30, 2013, the City had over $10 million in reserves, including over $4 million undesignated and an additional $4 million set aside for capital improvements and equipment replacement.  Why not use a portion of these funds to loan to the Sewer Fund rather than requesting an additional tax?  If reserves are inadequate, the Council should address that issue in a comprehensive way, not by this piecemeal approach.

Al Peters, Former Mayor of Piedmont

May 22, 2014

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  Comments are welcomed below.

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