Belt-tightening won't help authority
Berkeley Co. rate hike a 'necessary evil'
By Andy Paras
MONCKS CORNER — The financial problems at Berkeley County's Water and Sanitation Authority are so severe that it's going to take more than a little belt-tightening to fix it, advisers told County Council on Monday.
Authority Director Colin Martin and a team of attorneys and financial advisers told council that it must adopt a 30 percent water and sewer increase, as well as raise fees, or risk defaulting on a loan.
If the county defaults, a trustee for bond-holders could set utility rates, they said.
Martin said the authority is cutting costs, to the point it is $3 million under budget from last year. He said it's still not enough to cover a projected annual shortfall of $6 million. Martin said they expect to take about $2 million from its reserves this year.
"The amount that is discretionary — that can actually be cut — is very small," he said. Using any more of the authority's reserve funds would only hurt the county's credit rating more, Martin said. He and others did say, however, that council's decision to borrow $5 million from reserves earlier this year won't impact the bond rating because the reserves are at an acceptable range.
Council adopted first reading of an ordinance to raise the rates, but again discussed who's to blame for what advisers say is a perfect storm of circumstances.
Brian Nurick, the county's financial adviser, said three issues caused the county's problem: the approval of bonds without a plan to pay the interest, over-reliance on growth and a risky loan venture.
He said afterward that two of the issues were pushed by one person, former Supervisor Jim Rozier.
"Those locally controlled decisions were approved at the recommendation of the former supervisor," Nurick said.
Rozier and ousted authority Director Robbie Metts said late last week that they wouldn't have had to raise rates if they were still in office, but speakers — without naming names — said Monday night that it's unavoidable because of decisions that were made in the past.
The county issued $105 million in bonds in 2005 and set aside $10 million of that money as pre-paid interest for two years. Those payments became due in July 2007 — after the county supervisor election — but the county never addressed how it was going to make the payments.
A report included in the bond sale recommended the county increase utility rates 20 percent by July 2007 to pay for the increase, but Metts told council in 2006 that they didn't think rates would have to be increased for another five years.
Nurick said the second problem occurred when the former administration used money from impact fees to supplement its operating fees. He said about 30 percent of its annual operating revenue is dependent on growth-oriented revenue.
The plan backfired when the housing market stalled. Growth revenues went down from $13.5 million last year to an anticipated $5.3 million this year, Nurick said.
The third problem occurred in 2006, when council approved a variable-rate loan. The county's weekly interest payments ballooned to about $25,000 over budget this year when the company insuring the synthetic fixed-rate loan was stripped of its credit rating.
Nurick was fired by the former administration months after he told the authority not to take part in the risky loan. The gamble cost the county about $10 million, Nurick said. He was rehired by the new administration.
Councilman Tim Callanan, who was elected seven months ago, called the financial problems a "train wreck."
"I'm not blaming anyone on this dais for the problem," Callanan said. "I don't think the folks responsible for giving advice to this body did their job."
Councilman Caldwell Pinckney said he was never told that Nurick advised against the loan, but Councilman Steve Davis said he was against the loan the entire time.
"We got good advice in that instance and we didn't follow it," he said. "I think the rate increase is a necessarily evil and in that regard I support it."
The issue will come up for second reading next month.
Reach Andy Paras at 745-5891 or aparas@postandcourier.com.
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Comments
carolinadude (anonymous) says...
Rozier's "tax,borrow and spend" philosophy was bound to "sink the ship" sooner or later. All of the incumbent councilmen need to be defeated. Heck, one of these councilmen is an "accountant". What's wrong with this picture?
March 25, 2008 at 4:43 a.m. ( permalink | suggest removal )
Paul (anonymous) says...
The deficit should come from the present council's pockets who allowed these "financial problems" to occur !
March 25, 2008 at 8:48 a.m. ( permalink | suggest removal )
realityck (anonymous) says...
So, upon the recommendation of the former supervisor Jim Rozier, he convinced council to (a)give approval of bonds without a plan to repay the interest, (b) over-rely on growth, and (c) approve a risky loan venture - the variable rate loan, and when Rozier was given advice by the county's financial advisor, whose advise was NOT to do these things, instead of listening to that advise,he fires the man, shows us just how inept Rozier was.
Then, to top it all off, Rozier and Metts have the nerve to say if they were still running the show there would not be a rate increase!!?
I am not sure what planet Jim moved off to when he was voted out of office, but he is so far removed from any normal sense of reality that it simply defies logic, and it seems he took his little sidekick Metts along for the trip. How sad! And now, we - the taxpayers, are being punished for their stupidity.
March 25, 2008 at 8:55 a.m. ( permalink | suggest removal )
amylrod (anonymous) says...
If I may reiterate what I posted last week when this was reported, does BCWSA understand that if they raise rates, most households will cut their use of water which will result in less money brought in because we will be forced to conserve? In my household, we use on average between 3000-4000 gallons. We have installed one new toilet that uses 1.6 gallons of water. We will buy another one soon. We expect to use even less water as a result.
Sewer rates have increased from $28.00 to 33.60 since May 2003. It doesn't matter how much one tries to cut back, the result is we end up paying more. I believe in a modest increase - 20% was reasonable two years ago. Why not stick to that figure and let the county come up with the rest by selling off assets, properties, etc? And if they still decide to increase the rates by 30%, just how long will we be forced to pay this?
If there are others who have suggestions that would make this less painless for consumers, please, by all means, speak out. I am going to alert the members of Berkeley County Council to take notice of what is being written by all of us with these posts.
It is a shame the Post and Courier never thought this was important to share in Sunday's comment section.
March 25, 2008 at 8:56 a.m. ( permalink | suggest removal )
tmetts (anonymous) says...
I agree that we should vote in some new qualified members for County Council. I think the problem may be whom do you trust! At the 10 March 2008 Council Meeting, Larry Finney, a CPA with Greene, Finney and Horton reported that the County received the highest financial rating possible. "In layman's terms, that's as good as it gets", he said. He stated that the Berkeley County Water & Sanitation Auth. saw its' revenues increase $7 million to $36 million. Its' expenses increased about 20% to $22.8 million. The Authoritys' fund increased to $3.4 to $12.2 million over last year. Accordingly to Brian Nurick, the Countys' financial advisor, the Water and Sanitation Authority is in need of a 30% plus increase basicly to keep the Authority from "drowning". I understand that the CPA firm has worked for the County for sometime and Brian Nurick has provided advice only on a couple of bond issues. I trust the CPA firm. I think Davis and his advisors are using the current national and local economic situation to frighten citizens into thinking the Authority doomed so that he can have a larger pot of "gold" from which to draw from at will!
March 25, 2008 at 8:58 a.m. ( permalink | suggest removal )
Beerkrugul (anonymous) says...
I guess next they will ban me from using my well water for car washing and lawn watering.
Next time you have your meter read you may want to check it. The last time mine was read it was covered with mud. I still don't know how it could have possibly been read.
March 25, 2008 at 9:38 a.m. ( permalink | suggest removal )
amylrod (anonymous) says...
I have alerted the County Council members. I am sure most, if not all, will read what we are saying. Since not everyone can make it to a Monday night council meeting, this is a great place to air comments and give input, whether it be positive or negative.
March 25, 2008 at 9:41 a.m. ( permalink | suggest removal )
hgbyrd (anonymous) says...
on febuary 21 of this year i read the lowcountry section of the post and courier with the article about the new building for berkeley county water and sewer. it made me mad as hell and i will have voter revenge next election as we have had to do in the past. al parrish's assets had to be sold off to correct his criminal activities and berkely county should be required to sell this building that cost us taxpayers 8.1 million dollars and use their (our) reserve funds to correct this glaring example of ignorance in action. the tax payers of berkeley county deserve better. i am shure many real estate agents will be ready and willing to handle the deal or i can get a 99 cent for sale sign and stick to post in front of this monument to taxpayer abuse.
March 25, 2008 at 10:22 a.m. ( permalink | suggest removal )
oldglory (anonymous) says...
Once again--citizens/voters pay for major stupidity, or perhaps I should say majorly stupid officials.
Once again this morning--all comments here seem to be in agreement :) Hmm, maybe we need to be careful about so much agreement among ourselves.
BTW, I just love Harpo's post. Harpo must be close to my generation by those statements :)
March 25, 2008 at 10:42 a.m. ( permalink | suggest removal )
whome (anonymous) says...
Technically, is this a taxpayer issue? Once again, you got to love Wall Street. BTW, has anyone been checking the fine print on all of the alternative leasing programs that the School Districts used to build the new schools prior to the state prohibiting them? I'm sure credit derivatives are buried in them. Anyways, if you think Berkeley County got in over its head, Jefferson County (Birmingham, AL) is on the verge of bankruptcy because of the credit swaps they were using to finance its growth. It's nice we have such a selective free market system (or is selective socialism) in this country (e.g. Bear Stearns).
March 25, 2008 at 10:45 a.m. ( permalink | suggest removal )
tmetts (anonymous) says...
Good job notifying County Council members. My wife and I attend most of the Council meetings and I want to tell you that you gain much more knowledge by listening to the background and presentation of information for various proposals and recommendations. Also, you are able to see and hear the Council members questioning and discussion of those proposals and recommendations. Many times I have been very disappointed in the observations, lack of understanding, and just plain inability of some to present their views appropriately. You quickly ask yourself, How/Why did these people get on Council? You certainly can not gain the full scope of a particular situation by reading it in the newspaper. I encourage people to attend the Council meetings, if possible. If not, at a minimum, write each Council member and express you opinion/views.
March 25, 2008 at 10:52 a.m. ( permalink | suggest removal )
sbishop (anonymous) says...
Everyone is quick to blame Rosier. What they fail to see is County Council role in this. They didn't have to approve it. Ignorance is no excuse. Do some homework if you need to, ask some questions. In my opinion, the buck stops with County Council.
March 25, 2008 at 11:37 a.m. ( permalink | suggest removal )
amylrod (anonymous) says...
tmetts, I just read all of your comments from other posts. I would encourage County council to read them as well. You seem well informed and very knowledgeable on the issues. Thanks for your input!
March 25, 2008 at 12:16 p.m. ( permalink | suggest removal )
amylrod (anonymous) says...
Members of Berkeley County Council - if you are reading these comments, please read earlier comments on the article, "Water, sewer costs to rise in Berkeley County." Just type the title in Search Charleston.Net and read more on what people have said.
Both administrations have let the people of Berkeley County down. Again, many can't make it to meetings and this forum is our outlet to openly discuss the issues at hand. Each of us has a responsibility to keep our affairs in order; to pay our bills, to keep our debts in control. When we see government overextending and misusing money; when we see that elected officials can't keep their house in order by not being fiscally responsible, then how can the taxpayers trust you? Those who lost their homes or are close to losing their homes because of ARMS want the government to bail them out at everyone else's expense. Because of your poor financial planning, you now expect us to bail you out.
Hgbyrd mentioned a sum of $8.1 million spent on what I am guessing is a new BCWSA building. Is this correct, or is this referring to something else? I'm a bit clueless on this. I did notice that the parcel of land on Sangaree Blvd is up for sale. I hope you can find some other properties to sell in order to keep passing higher rates on to the residents of Berkeley County. We deserve better - we demand better!
March 25, 2008 at 3:54 p.m. ( permalink | suggest removal )
sunny (anonymous) says...
I forgot to pay my bill a couple of months ago, I called BCWS and the representitive told me that as long as payment was made by Monday I would be fine. I let her know that I would drop payment by that weekend. As promised, I dropped a money order in their drop box Sunday night. Tuesday I was cut off. I called FROM WORK, after two hours, several rude reps, who basically called me a liar, and many messages left, the office manager finally returned my call. He was extremeley rude and told me "the buck stops here", He finally agreed to turn my water back on but charged me the $40.00 reconnect fee. I am still livid with how unproffesionally they handle their customers and how this man spoke to me. I feel sorry for his wife, if he has one.It angers me that some utility providers feel they can treat people like that because the know they are the only provider in the area. If there were a choice in companies, I can guarentee that I would take my business elsewhere. If they keep screwing over their customers like they did me, they may make up some of that money they owe quickly!!
March 25, 2008 at 4:02 p.m. ( permalink | suggest removal )
tmetts (anonymous) says...
hgbyrd, I can understand some of your frustration, however, a new building was needed, however, the newly hired Water and Sanitation Director requested from Davis and Council approval of an additional $400,000 to expand the new building before it was even completed, because a manager and some employees wanted it. Of course, Council approved it. I know first hand that wasn't necessary. Berkeley County School Superintendent and School Board was charging the Authority a pretty good sum for rent on a vacant school in Goose Creek which did not allow for a most efficient operation. In my opinion, that was money going "down the drain" so to speak. Again, the Authority was, and should still, be financially able to pay for a new building without having to increase our rates.
March 25, 2008 at 5:26 p.m. ( permalink | suggest removal )
ForPnC (anonymous) says...
Old Army talking here:
Bottled water WILL be cheaper than tap now. So will beer!
I can gather and purify water from the ditches in the neighborhood. Get out barrels when it rains as well.
I can shower at work which is not located in Berkeley County.
If I can't hold "it" until I get to work then it will be the only time I flush during the day. Or, I can go back to digging the six-inch cathole on the empty land next me. A few bricks in the back of the toilet will lessen the water used.
Wash my car when it rains. Wash my dogs in the lake at the dog park.
Disconnect the washer from the drain and use that water for the grass.
There's a HUGE list. I've done this before.
Tell me, when you STUPID people pop your heads out of your collective butts and pay off YOUR debt - Will the prices go back down or is this a permanent screwing? I save bacon grease too.
B.O.H.I.C.A.
March 25, 2008 at 6:28 p.m. ( permalink | suggest removal )
Conservative1 (anonymous) says...
From reading all the posts, I came up with these thoughts. I hardly know the people who made the decisions or why. It seems some tried to gamble with the money and it didnt work out. If it did, it might have been a good deal. I guess people like less risks. Imagine that. But since I dont have insider information, I really cant comment.
But I can comment on this.
I know many people who live by themselves, myself included. We dont use 2000 gallons a month. More like a 1000. BCWSA charges normally $46.48 a month for service to these people. I dont have a problem with this neither do they. For many many months we use less than what we are charged for. We are saving them time, money and efforts and have been for years.
CHARGE PEOPLE THE SAME PRICE AS ALWAYS.
BUT
INCREASE USAGE RATES FOR USE OVER 2000 GALLONS.
A lot of older single customers are having a hard time now. Why should they and the rest of us single dwellers have to make up what is apparently a situation mostly related to the housing industry fiasco.
What about the houses that have like 8 heads living in them. They get charged about $70 a month and they're loving it. Their price is $9 a month. What a deal for them. Illegal as he!! and choppin up the system AGAIN! WHY are WE subsidizing THEM !?!?!
If you are going to change rates base it on USAGE!
GALLONS CONSUMED.
Then you will encourage conservation. Then you can serve more customers with what you have now.
Man was it a bad time to place bets on the housing industry.
March 25, 2008 at 10:14 p.m. ( permalink | suggest removal )
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