Tag: 4.9 mill operating levy

by Cassie Mattia and David Miller

When we first heard about the City of Loveland raising water rates only one of our brows raised, but on closer examination, real-life experiences, and asking questions of Loveland’s City Council Members we went full brow.

Below you will find the questions we asked all seven council members in an email on December 29. Two elected officials, Kip Ping and Andy Bateman, out of the seven responded. We decided to re-send our questions to the remaining five council members, Mayor Kathy Baily, Vice-Mayor Ted Phelps, Kent Blair, Neal Oury, and John Hart, on January 11 to ensure they received them and we received no responses, not even an acknowledgment that they received our questions. All seven members voted for the new water fee.

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For publication:

You recently voted for a flat rate increase for water customers. Loveland Magazine is following up on a recent story we published about the increase (Early holiday presents for Loveland homeowners – It’s coal under the tree). Would you kindly respond to these questions/propositions?

It seems you determined the amount you wanted to collect for the infrastructure repairs was $450,000 in year one and to achieve your goal you simply divided that number by the number of units you could bill and are charging a flat rate to all.

The flat rate appears to apply equally to single-family homes, each apartment in a complex, and commercial and industrial users.

The total you determined to need in year one is $450.00.00 and that was divided by 5,000 (estimated number of units).

$450,000 ÷ 5,000 = $90/year

$90 ÷ 12 = $7.50/month/unit

Correct?

It also seems you already know the actual number of gallons of water each unit consumes each month or year. Would not a rather easy math calculation determine each unit's impact on the distribution system based on actual usage?

Why was the rate increase/unit not based on actual gallons consumed?

There seems to have been no consideration based on income, disability of a user, being a senior citizen, or being a retiree on a fixed income.

There seems to have been no consideration based on an individual's commendable water conservation efforts.

You have implemented a proportional rate increase — one that takes the same amount from all income groups regardless of their ability to pay. It is a regressive rate — a rate that takes a larger percentage from low-income groups than from high-income groups.

Why was a progressive rate not used that would charge more for high-income groups than for low-income groups?

Thank you in advance for responding with your thoughts and answers.

Best regards,

David Miller and Cassie Mattia

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Cassie Mattia Responds

I have now been a resident in Downtown Loveland at the Loveland Station Apartments for 5 years. To be quite honest, the inflation I have seen citywide and nationally has been shocking.

The city of Loveland announcing a water increase was just the icing on the cake after being alerted that I would have another rent increase as well. My boyfriend and I have worked very hard to get to the point we are at in our lives financially and in our careers, but with all the increases in the city of Loveland, I have had to take on the burden of once again working multiple jobs just to afford to live comfortably in Loveland.

I never would have thought after securing my dream job as the Public Relations Coordinator at the Butler County Board of Developmental Disabilities that I would ever have to go back to working multiple jobs, but that is now a reality I have to accept.

When will enough be enough for my generation? When will we have to stop living paycheck to paycheck even though we were told growing up that getting a college degree would prevent us from experiencing that? When will we be able to buy a home and stop getting hit with rent and utility inflation? I will admit I am one of those people that is money motivated so I am always striving to see how much more I can build my savings, but I think one of the biggest reasons I am that way is that I don’t want live paycheck to paycheck. I want to build a great life for my family, but at age 33 with a great financially stable career that I have worked oh so hard for, why should I still have to live to work? 

Council members, Kip Ping and Andy Bateman took the time to respond to our questions about the city of Loveland water rate increase, which David and I both greatly appreciate.

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Good afternoon David and Cassie,

Thank you for your inquiry. This is an important issue as it is vital that we plan for the future maintenance of our water system rather than waiting until we are in a crisis such as we have seen recently with some other cities. In the past there has been a practice in Loveland of borrowing money to repair the water infrastructure. We are fortunate that much of our water system is newer, so this has not necessarily been an inappropriate approach, but as the system ages it makes less and less sense to continue this way. Even if nothing else were at issue, letting the debt service get out of hand is not a direction we want to take. The new fee will allow a more proactive response which will eventually draw down that debt service and put Loveland in a better position in the long term. While we know of no imminent issues with the system, we do know that each year it gets a little older and prudent planning demands that we address this before it becomes a critical issue. With this in mind, Council made what I think was the correct move in putting this fee in place, all the while knowing that it would not be a popular thing to do.

I agree that the current fee does nothing to promote conservation or reward it, however, the current billing model already does that via the charge for both water and sewer in the usage part of the equation. The new fee is limited to use for maintenance of the actual lines, and conserving water does not affect the cost burden that must be considered for this. We must pay the same for a mile of pipe regardless of how much water goes through it. The system thus becomes more expensive per gallon as water use is decreased.  Keeping these charges separate allows rates to reflect usage costs and the fee to reflect the maintenance cost.

I appreciate your concern for those of modest means and agree that we need to be thoughtful about the impact of this fee on them. Your desire to use a usage based rate to protect these people, though, seems to be built on the presumption that the groups you mention would by necessity have low usage.  I’m not convinced that is the case. I am personally aware of a family on a fixed income who uses more water than my wife and I, though we have substantially more means than they. Putting this in as a usage fee would result in them having a higher bill than my wife and I on top of the already higher consumption fee they pay. This would be the opposite outcome of what you are trying to achieve with the usage method. I am not arguing that this one specific example can be extrapolated to the entire community and would be valid in every case, however, I am arguing that your presumption that water usage is directly proportional to income is not valid in all cases either. Any comparison of empty-nesters in our more affluent neighborhoods like Sentry Hill versus families in less affluent areas like the Heights would likely show that usage is not going to substantially change the extra cost on the bill.

Another aspect of this issue is that of access to usage. Utilities are different than other forms of consumption because of the way the good is distributed. History on these issues has shown that because of this difference there have been some unique problems with regard to fairness. Electric utilities, for example, wanted to charge the farmer more than the city dweller because he used less electricity but required more infrastructure to get the electricity to his farm. This would have resulted in rural consumers being charged more in fees for less in consumption (assuming they could afford the fees). The government by prohibiting this practice dictated to the utilities that having users spread equally the cost of the delivery system was more fair than basing the fee on the cost to the system to each user even though it meant urban users paid more than rural users relative to the demands on the system. Again, I am not arguing that this is applicable to all or even the majority of our water system users, but it does show that there are many factors in the equation when one considers the notion of fairness.

As with any collection of public funds, there will be some that fair more poorly than others. Regardless of the system used, there will be exceptions that we can find and argue as unfair to certain people. Our effort can therefore only be to minimize those situations to the extent possible.  While we may not have chosen the system you feel is best, I assure you that thought was given to the fairness of this fee and how to minimize its impact on the system’s users.  That said, as the subject of taxes and fees is one that is of upmost importance to all taxpayers, I have copied City Manager Kennedy on this email and will follow up with him next week to see if there is any data available that has been inadvertently overlooked and would support your assertion that usage is proportional to income. In the absence of data showing that correlation, I do not foresee changing the fee structure.

Sincerely,
Kip Ping

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Cassie Mattia’s Response Continues…

Mr. Ping made some very great points in his email and I of course can understand the thought process behind implementing the water increase citywide. I will admit I am not as educated as Mr. Ping is in regards to the city’s water infrastructure and what the future could hold as the city’s water system “ages,” but I will say that I am a little confused as to why homeowners in Loveland are experiencing on average a 3% increase ($1.50 per month) in their water rate while all those living in apartments within the Downtown Loveland area were informed that there would be a gradual increase over the next few years and the increase in 2023 would start at $7.50 per month tagged onto our bills. We were told the increase would eventually amount to an extra $10 on our bills.

This is not only confusing to those that received this notice but also makes no sense considering someone owning a home would obviously consume more water than a person living in an apartment. The city’s press release vs. what we apartment renters received contradicts one another.

As a Loveland community member, I would love some answers as to why as a renter I’m being penalized not only with another huge rent increase but now a substantial water increase. Within my apartment, I use very minimal utilities in general, but with this $7.50 increase and what my water bill typically sits at, that will put my water at a 5% increase. I am confused as to why this increase is different for renters in the city. We are already paying on average $1,800 for rent (side note we can’t buy a home due to astronomical interest rates and down payments, especially in this area) and up to a 10% increase in other vital bills that have to do with being a renter. We are also A VERY LARGE part of Loveland’s economy and community. I need answers.

Mr. Ping did bring up an excellent point in regard to “access to usage.” He said, ” Electric utilities, for example, wanted to charge the farmer more than the city dweller because he used less electricity but required more infrastructure to get the electricity to his farm. This would have resulted in rural consumers being charged more in fees for less in consumption (assuming they could afford the fees). The government by prohibiting this practice dictated to the utilities that having users spread equally the cost of the delivery system was fairer than basing the fee on the cost of the system to each user even though it meant urban users paid more than rural users relative to the demands on the system.”

With that said, it makes even less sense as to why apartment renters in Loveland are experiencing such a severe increase compared to homeowners when it comes to water rates.

As I mentioned previously, I am absolutely not an expert on city utilities and the ins and outs of the water infrastructure. I am simply a concerned Loveland citizen that will always speak up when things seem in disarray within our community! I can only hope that those in positions of power locally and nationally will begin to look at the issues brought forth by those brutally affected by greed and inflation and begin making decisions that benefit my generation. We will not survive without the support of our local and national governments.

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Council Member Andy Bateman’s response:

David,

First, I stand by City Manager David Kennedy’s explanation of the water main replacement fee, during his presentation to council, and in the Nov 29, 2022 press release. Second, I implicitly rely on staff expertise regarding the methodology used to determine the proposal.

Prior to the Ordinance 2022-115, the city’s water maintenance program; too reliant on loans and grants, more reactive than proactive, had, in the view of many on city staff and committees, become unsustainable. Collecting a maximum of $114 annually from each account ensures a dedicated source of revenue to apply toward ongoing replacement of 76 miles of water main. Rather than wait for funding stars to align, or allocate fund dollars to debt service, the WMR fee gives staff an opportunity to be strategic and comprehensive in their planned replacement over the long term. 

Serious considerations of various socio-economic factors within the service population veers into the semantics of fairness and equity and given the history of deferred maintenance of the city’s water system, I feel that a proposed solution was overdue, and voted in favor of the legislation.

This is not to say that I am completely unfeeling toward those in a position in which this fee holds a greater financial impact. Certainly, in this inflated economy, the cost of everything gives us all pause. But without this fee structure in place, the city’s water customers could be subject to water rate increases, variable month to month, to fund more immediate water main replacements, acting as a funding band-aid for one council to pass to another down the line as we have been doing. 

This council voted for more sustainable infrastructure which delivers its most basic and fundamental services. With that action comes a request that each customer pays its share toward preventative maintenance of that system, and in essentially creating a layer of protection for the future of Loveland’s municipal water service.

Thank you for reaching out and I am available if you have any follow-up questions.

Sincerely,
Andy Bateman

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David Miller Responds

I reject out hand Mr. Bateman’s assertion that our concerns are mere, “semantics of fairness and equity.”

I reemphasize my initial concerns.

There seems to have been no consideration based on income, disability of a user, being a senior citizen, or being a retiree on a fixed income. There seems to have been no consideration based on an individual’s commendable water conservation efforts. City Council has implemented a proportional rate increase — one that takes the same amount from all income groups and water users regardless of their ability to pay. It is a regressive rate that takes a more significant percentage from low-income groups and low water users than from high-consuming individuals or corporations. Why was a progressive rate not used that would charge more for high-income individuals and corporate users than for low-income individuals and those who consume less water?

Within this period, any member of our Council should have foreseen that the Loveland Board of Education was heading back to the ballot with a new tax request and indeed they have voted to place a 4.9 mill operating levy on this May’s ballot. The residents of Loveland will be asked to raise their tax rate for the District to receive more dollars for operating expenses and the only way to do so is to ask residents to tax themselves. I believe this action by Loveland Council will subtract from the possible “Yes” votes who would otherwise allow the school children to have more dollars spent on their education.

With disregard for seniors on a fixed income and amid the recent uproar and now three consecutive defeats of Loveland City School District levies over those concerns, our City Council has pulled out the proverbial rug from under the feet of our children.

Concerns over inflation, rising home ownership costs, and seniors being forced from their Loveland homes have been the most cited reasons for the school not receiving the added operating funds they requested from voters.

The flat-rate, permanent water fee will increase the cost to own a home in Loveland by $90/year immediately, and $114/year beginning in 2025.

There is a genuine disconnect between City Hall and the Loveland Schools, the needs of our children, senior citizens, the disabled, those on fixed incomes, millennials, and gen Z.

Even forgetting the concern of the inequity of the water fee, voters don’t forget these things when going to the polls with a yes or no choice of raising their taxes.