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Apparently, suburban
leaders from Sylvania, Perrysburg and Maumee are not going
to allow the City of Toledo to “slap them and take their
wallet.” At least not when it comes to providing millions of
suburban dollars to upgrade Toledo’s water treatment plant
at Collins Park.
Mayors from our
neighboring communities are willing to invest by continuing
to buy water from Toledo, but not without receiving equity
in a yet-to-be agreed upon new regional water district.
Toledo Mayor Paula
Hicks-Hudson, like former Mayor Carty Finkbeiner before her,
has taken a hard line stance against giving up total control
of what is perhaps, the city’s most valuable resource.
Yet, Hicks-Hudson’s
looming decision for the city’s 21st century
water management structure has the potential to greatly
impact her legacy and make or break her future as mayor of
the City of Toledo.
Who will blink first?
The village of Waterville
has already bailed on its previous arrangement with the city
and will now, instead, buy Bowling Green water instead.
Should Toledo not meet their demands for an ownership stake
in a regional water district, Sylvania, Perrysburg and
Maumee could soon follow suit and decide to either purchase
water from an alternative source or construct their own
water plant.
If so, the long-term
financial implications could spell trouble for Toledo’s
budget as well as for residents located in its urban core.
Most notably, the city
could have difficulty in obtaining bonds to finance the $185
million that they’ve already committed to spend (and are
starting to spend without bonds being backed) in next year’s
bond market, should they lose the 40 percent of their
revenue stream paid by the suburbs targeted for bond
repayment. And even if the city is successful in obtaining
the bonds from the primary market, the interest rate will be
super expensive and could reach double digits, commensurate
with the perceived risk by the market.
The other alternative
would be to go to the secondary bond market because the top
houses may not be willing to extend $185 million in credit
to a municipality for a project that just lost 40 percent of
their revenue stream. The cost in this case could be
prohibitive and make the project not feasible.
Meanwhile, residents of
Toledo’s urban core, with constant worries about rising
energy costs and efficiencies, remain skeptical of any
regional geo-political arrangements. Yet, they also stand to
lose under any status quo arrangement.
Many feel that the city is
already “putting the thumb on” the urban poor and has
continued to do so for years. Currently, Toledo residents
are hit with a minimum water consumption charge based on
2,000 cubic gallons of usage compared to the 1,000 gallon
minimum available to many suburban residents.
Continuing the 2,000
gallon minimum is oppressive for the poor and urban seniors,
especially considering that 800 gallons/month is a more
accurate measure of usage for many people living alone or in
small families. Hicks- Hudson and city council, should cut
the minimum charge by roughly 50 percent if they intend to
have energy costs and water policies that are fair for urban
households.
In addition, new water
management policies should include energy assistance
programs such as HEAP or PIPP (Percent of Income Payment
Plan) to provide payment help for poor or unemployed
residents. These assistance programs are currently available
residents paying other energy bills such as gas and
electric.
What happens should
Hicks-Hudson choose cooperation over conflict?
If enacted, policies would
be implemented that lessen the economic strain for poor and
elderly residents. Financial benefits would also accrue to
the city as the suburban communities pick up the tab for a
$185 million investment in a 21st century water
management system that is smart, clean and energy
efficient.
Also, the interest rates
paid for bond financing would be much lower based upon the
inclusion of suburban communities, rather than the higher
costs likely to be required should the City of Toledo
attempt the massive project alone.
And finally, as an
administrator close to the project marvels, “Tell me what
everybody’s big attraction is to having the responsibility
of running a billion dollar plant that takes chemicals, and
the intense scrutiny of the EPA all the time. Take it from
me, water plants are a pain in the ass to run, plus you have
to carry the bonding and indebtedness of the plant on your
books.
“And then City Council
gets stuck having to raise the rates. Politically, it’s no
fun. Operationally, it’s a pain, and financially, you’re
carrying a lot of debt on your books.
“With a shared governance
structure, you can offset all of that and not allow the
emotional thing of ‘I own the water plant’ lead you into
possible bad decisions.”
Contact Rev. Donald Perryman, D.Min, at
drdlperryman@centerofhopebaptist.org
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