To the Gazette:
After attending the city's open forum on water solutions, I would like to thank the mayor, council and city staff for confronting a problem that is certain to be expensive, arguably overdue, and definitely accompanied with critics. In this commentary, I do take with faith – misguided or not - that the water line between El Dorado and Augusta is degraded beyond feasible repair.
There are concerns to still be addressed on some of the items presented. The recommended proposal for the route of the new water line from El Dorado to Augusta was a zigzag path through an entirely new route, which also added three miles to the line. The cost of this is the previously disclosed (approximate) $20 million. While this may be best, it was very disappointing the cost of running the line through the existing easement could not be quantified. I am sure there are risks to using the existing easement - but they are the same risks this community has had since the line was built. To me, the reasons provided for not pursuing use of the existing easements - railroads are hard to deal with and a train wreck could contaminate the water - are speculative based on conjecture and not facts. I do understand something bad could happen, something bad could also happen to the new line - the point is what does the alternative (run the line through the existing easement) cost? What is frustrating is there appears to be a path chosen, and alternatives not thoroughly vetted.
At the end of the day, the preceding issue is fairly straight forward, and can be dealt with over time. The biggest and most urgent part of the discussion was on a funding source for whatever the water solution ultimately ends up being. The urgency arises because if the funding source is a sales tax, it needs to be voted on by the public. For this item to be included in and voted on in the November ballot, it needs to be approved by the city council and sent to someone in our vast government by early next week. In my view, the city's recommended proposal to use a sales tax has not been thought through with long term implications in mind. When tax or fee based sources can be matched with uses, they should. In this case, a water usage based fee can be matched with water use - in fact a perfect match. A sales tax has no relation to water use. In fact it is at best unorthodox to use a sales tax as the major funding source for a specific fee based enterprise - in this case water. One rationale for using a sales tax is that it provides for a revenue stream from citizens outside of the community. There is an element of truth to this for Augusta and any community. However for Augusta our in-town per capita retail spending is below that of most of our neighbors - meaning the income of our community is leaking to other communities. This is not a critique, but at present it is a fact. I am sure the new Wal-Mart will help to shift some of these patterns, but if history is any guide, Wal-Mart - while a great change for the community - will not provide close to 100% incremental sales.
Page 2 of 2 - During the forum, the city's analysis showed a substantial increase in water fees - if the cost of a water line is funded entirely through said fees. I think a relevant point of analysis that was left out by the city was looking at Augusta's water fees versus other cities. From my experience Augusta is very low - I am a believer you can't perennially beat the odds, and now it is time to pay the piper. Wichita, from what I read, is experiencing the same thing, and incidentally paying for it with water usage fees, and not a sales tax.
So if you believe we need a water solution, the question comes back to how to pay for the fix. No matter the funding source, you still have to pay the same amount. If the cost is $20 million, it doesn't matter if we pay for it with sales tax or water fees.
* A water based fee matches sources and uses, and risk and reward for customers. It also brings our water fees in line with other communities.
* A sales tax is, from most economic theory, hardest on the least fortunate.
* Using the sales tax for the purpose of water leaves the city with very limited options for funding future capital expenditures - known or unknown. According to the city, the proposed 1% sales tax will be in place for approximately 30 years - on top of the existing 1% sales tax used for other infrastructure. So the vast majority of the city's sales taxing ability is tied up for a few generations in building/maintaining necessary, but not aesthetic or value adding assets. If the point is made that the water line is value adding and has hindered growth - I would challenge that by saying the Mulvane casino - with sophisticated developers - is very aware of the water risk and built anyway. They know there is a solution.
* A water based fee makes it much easier to apportion costs to ALL of our customers with whom we share the same limited water risks.
In summary, I would ask the city to consider matching sources and uses of funds. A sales tax may be a good secondary source for the water issue to retire the debt faster (save interest costs) and/or provide funds for parks, capital reserve or other purposes - but make the water fee the primary funding source. Or alternatively if/when we need capital for future hopefully worthwhile project, the city can raise water fees - and create a byzantine, zigzagged set of sources and uses of funds that will match the new water line being proposed.