Update on Reform Richmond’s Water Rate

Posted: March 5, 2014 in Uncategorized

Reform Richmond’s Water Rate

From Scott Burger:

Speech given to City Council Finance Committee during public comment period on Feb. 20:

Good afternoon. My name is Scott Burger and I am a City resident.

I would like to congratulate Councilmembers for requesting this needed report. If the City government is to truly tackle poverty, it must consider the living costs of its residents. City utility bills and fees should be a major focus, since they do fall under City government control. Thank you for looking into this.

In short response, I am still looking through this report, however I say right from off the bat that the city needs to face up to the fact that the PILOT payment in lieu of Federal Income Tax is not legal and must be removed. This is not a charge that is found in ANY other public utilities in Virginia. State code allows for the locality to charge taxes that the utility would pay if it were not publicly owned, but no business pays Federal Income Tax to the city!

Also, in particular to the report, I strongly object to the savings per customer in the removal of the PILOT in lieu of Federal Income Tax shown in a small reduction of the VOLUME rate vs. a large reduction in the SERVICE charge. There is no reason whatsoever that the elimination of the PILOT in lieu of Federal Income Tax should not be removed directly from the SERVICE charge. The PILOT payment is not a production or delivery cost.

By my estimation, each customer’s monthly water/sewer SERVICE charge would be reduced by around $7.62/month with the elimination of the PILOT in lieu of Federal Income Tax!

Let me repeat that, By my estimation, each customer’s monthly water/sewer SERVICE charge would be reduced by around $7.62/month with the elimination of the PILOT in lieu of Federal Income Tax!

Here is the math: $5,442,575 raised annually from the water/sewer PILOT in lieu of Federal Income Tax. 51,825 residential customers + 7,683 commercial customers = 59,508 total customers. $5,442,575 divided by 59,508 customers = $91.45 savings annually per customer on the water/sewer SERVICE charge. $91.45 divided by 12 months = $7.62 monthly savings per customer on water/sewer SERVICE charge.

Furthermore, the City government is leaving itself open to litigation and potentially to an enormous liability if it persists in charging this outrageous PILOT in lieu of Federal Income Tax that is of very questionable legality. The fact that no other locality in the state that we can find charges a PILOT in lieu of Federal Income Tax should give them ample reason look closely at this and to correct this aberration. Someone at city hall years ago wrongly decided to manufacture this charge.

Some people tell me that, oh well, the City of Richmond uses water bills to balance its budget and we have to have this overcharging for water. By pushing this issue, they say, I am blowing a hole in an already bleeding budget. I would like to remind you all where that budget comes from and if people are so concerned about the budget, maybe the government should not be giving public money to private entities for art centers, stadiums, and training camps. Something to consider as you go over the rest of this afternoon’s agenda.

Thank you.

Scott Burger

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