Water sales comparison 2011-2012 for Sioux Falls

I would like to thank Finance Director Tracy Turbak and Public Works Director Mark Cotter for getting me this info.

You can see that revenue has gone up quite a bit from last year (granted there has been a draught, more users and rates going up) But this information is very telling as to why water restrictions may have been held off for so long. Thoughts?


#1 Craig on 09.26.12 at 9:01 am

Why do you continue to push forth this theory that they didn’t enact restrictions sooner simply as a means to make money? It isn’t like they can hide those funds, and if revenues exceed expenses for any significant timeframe it would be all but impossible to justify more rate increases.

The fact is we now have watering restrictions year round. We can only water on even or odd days (depending upon address), and we can’t water between 12PM-5PM. These things were done in the name of conservation. The city has also improved the billing system to provide more detail and show people how much water they use per day… again in the name of conservation. If it was all about “profit” they wouldn’t care if someone watered their lawn at noon every day of the week.

You will note we haven’t run out of water, which means the restrictions seem to be working. There was never a point throughout this summer where taps ran dry due to a lack of supply, thus there was no reason to limit the amount of water people were using. We all know people who waste water attempting to make their lawns look like the 17th hole at Augusta, but provided they are willing to spend they money why should we care?

Personally I’m glad water sales are exceeding costs. I’m hopeful they can put those funds away and the next time we need a new water tower or sewage lift station or the next time we need to replace miles of old sewer lines we can actually pay for it instead of bonding for it and putting the city in to even more debt that we can’t handle.

One final thought – in the future when requesting numbers you should look at the entire 12 month period. I would be very curious if water sales during the winter months were sufficient to cover all costs or if there have been times the city ran the water plant at a loss knowing the sales in the summer would make up for it.

#2 GregN31 on 09.26.12 at 9:40 am

I agree with Craig to the extent that I don’t think there is any conspiracy in regards to the timing of enacting water restrictions. I take engineering at their word that they hit trigger points and so they enacted the restrictions. I don’t have any issue with that at all. The extra money, presumably, as we’re told, is being used to build up a reserve for capital improvements and repair down the road so we can keep up.

My real issue is where we get this excess revenue from. I’d argue we should be taking it from the second penny which is after all supposed to be for capital projects. What we’ve got here is a sleight of hand – we commit our 2nd penny to debt service on event centers, and then raise water rates instead. Many will argue that this is how it should be done so that people who use it pay for it. I would note however that we could take that argument to the extreme and do the same for other city services. You could charge me an entry fee every time I get on the bike trail I guess. Or maybe put a chip on me and have tolls and use that revenue to pay for repair/replace of the infrastructure. Then at least those who use it would pay for it, and you’d open up for CIP money for other things. So where does it end. My beef is with the policy/direction of the last two mayors and several councils – use the 2nd penny for entertainment items, replace lost revenue by cranking up fees, but then at the same time argue that taxes aren’t going up to pay for the event center and that we ‘really need this rate increase’ or the whole water system will collapse. No, you have the revenue, you just voluntarily choose to commit it to non-essential items.

#3 Badbenboyenemy on 09.26.12 at 9:45 am

I haven’t watered my lawn all year. I let nature take its course and my lawn went dormant, because I’m fully aware of the fact that this isn’t Ireland.

You all should do the same, because in a few short years, there is not going to be enough fresh water to waste making our lawns green. Oh wait, we’re there already.

#4 Pathloss on 09.26.12 at 9:47 am

I’m impressed that Mr. Carter responded. He could have ignored you like most others in city government. Obviously, there was less rain & more water use. Also, the city has grown. It seems water answered demand and future demand can be answered.

#5 GregN31 on 09.26.12 at 9:55 am

For what its worth, I haven’t used my underground sprinklers in maybe 3 years. I barely ever used them before. I just couldn’t justify the cost for a green lawn and I’m OK with a dormant lawn. My lawn has been toast all summer. My neighbor behind me has a lawn as green as a golf course, I can tell he waters multiple times a week. If he wants to pay for it, I guess go for it. And no, I have no intention of reporting him either.

#6 Muqhtar on 09.26.12 at 11:01 am

I guess this is the “problem” with a not-for-profit, government run utility. When Xcel Energy needs to upgrade a major power line or perform maintenance at a power plant they don’t double the rates of the whole customer base at once to pay for it – it was built into the cost of the energy for years or it is financed using lower-cost instruments. Same with the gas company. We never hear about it and we don’t see our bills radically fluctuate to accommodate physical plant projects. Water? It becomes political and scandalous and the rates fluctuate greatly under the heavy hand of politics rather than finance. I’m not saying “go out and privatize water and sewer”. But this is my observation.

But yes, I’m miffed by the doubling of the water prices. My recent water bill is completely ludicrous. Then again I moved here from Minnesota and water is something we often have too MUCH of.

Another thing that this reminds me of or leads me to is the scandal-ridden $3 billion sewer system overhaul in Jefferson County, AL (Birmingham and suburbs), which led them to file bankruptcy in 2011 (see http://www.bloomberg.com/news/2011-11-09/alabama-s-jefferson-county-files-for-u-s-s-biggest-municipal-bankruptcy.html) in one of the largest Chapter 9 bankruptcies in US history. Everything about it was skeezy. It all started when the EPA determined that Birmingham was dumping too much crap (literally) into the fragile Cahawba River ecosystem, ruining the habitat of a number of different species of fish and wildlife. So they overhauled all off the sewage treatment and sewer systems at a price of $3 billion (in a metro area of about 1 million people – not humongous but not small). It was all financed with bonds written by NY powerhouse financiers (JPMorgan being the big one) who more or less bribed county commissioners to take the bonds with sketchy and controversial bond-swap provisions which ended up blowing up in their faces and significantly increasing the debt owed by the county to the banks. A number of Jeff.Co. officials went to jail and the county commissioner-turned-mayor of Birmingham was removed from office. So… when I see governments fund large infrastructure projects or building projects (a la EVENTS CENTER) that require a ton of financing (a la EVENTS CENTER) I look through the lens of what the people in Birmingham are dealing with (here’s a running list of everything that is financially falling apart there because of this: http://www.al.com/jeffco/).

#7 l3wis on 09.26.12 at 4:03 pm

Greg – You are right, the shifting of using water fees to pay for capital projects was done so there would be more money in the CIP for playthings. Capital money should be spent on capital improvements.

#8 Ol' Timer on 09.26.12 at 5:51 pm

Was this is the reason for the millions of dollars for the Lewis & Clark pipeline is so the wealthy in Sioux Falls can water their grass?

#9 Detroit Lewis on 09.26.12 at 10:14 pm

Ol’Timer – Oh boy, I could go on for a long time about L&C. But please, just do a search.

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