Harris’ plan for sewer fees
takes flak from Council
Sewer fees could rise after all if the City Council does not go along with Mayor Jeremy Harris' plan to pay for sewer construction debt.
Some councilmembers are miffed that the administration is planning to use what amounts to debt to pay debt on city bonds that will become due next fiscal year. But if they nix the plan, they might be forced to raise sewer fees to balance the operating budget.
"It looks good now because you're not raising sewer fees," Councilman Romy Cachola told administration officials yesterday during a Budget Committee meeting, "but in the long run everybody suffers because we're just delaying the inevitable."
When the mayor submitted his proposed $1.22 billion operating budget to the Council in February, he said he was balancing the budget without having to raise sewer fees to pay the debt on sewer construction bonds.
Instead, the administration is relying on a financing tool similar to a line of credit called tax-exempt commercial paper to pay for up to $10 million in bond debt, officials said. But that $10 million must then be refinanced over a period of about 30 years to pay off the amount.
Budget Director Ivan Lui-Kwan said after the meeting that the administration's decision to use commercial paper is permissible under Council policy and had been approved by the Council.
"This is the process approved last year, and the objective is to provide relief to ratepayers now," Lui-Kwan said.
If Council members do not approve the plan, "they have the choice to decide whether they want to raise rates," he said.
The Budget Committee deferred taking action on the proposal. Budget Chairwoman Ann Kobayashi said that the mayor was "just fooling the public" when he announced no sewer fee hikes, because the public will still be paying in another form.
However, the committee did approve the mayor's proposals to raise business property tax rates and also to increase landfill tip fees. Members of the committee said they did not like the proposals but were moving them on for a public hearing on Thursday.