CITY WATER-SEWER DEPARTMENT SITS ATOP MONEY MOUNTAIN
Sunday, June 16, 2019 … 3:31 P.M.
Regardless that a considerable number of Shreveport city officials are busily denying it, our city’s water and sewer operation is awash in our money … increasingly so over the past five-plus years.
In fact, the official balance of the Water and Sewerage Enterprise Fund has jumped more than $45,000,000 since budget year 2013: from a December 31, 2013 deficit of -$2,958,700 to a December 31, 2018 surplus of $42,188,600.
According to the City’s budget documents – see links below – the windfall is set to add another $1,656,200 to that surplus this year, pushing it up to $43,844,800.
This was never meant to be.
Municipal utilities are typically monopolies, expected to break-even … charging residents and businesses whatever it takes in water and sewer charges to pay for the system’s operation.
That was the case here as recently as 2013. The fund balance at the beginning of the year was $2,382,900. The total available to spend was $64,536,700, and costs ended up being a bit higher at $67,495,400 … thus the less than 5% deficit, covered the following year.
Now, regardless of our population decline, the total available for expenditures has more than doubled in six operating years, from $64,536,700 in 2013 to an expected $139,062,000 for this year … up 115.5%.
The flood of money into this “protected” Enterprise Fund is supposedly explained by a consent decree between the City and the U.S. Environmental Protection Agency, filed in early 2014.
Thus commanded to improve our “sanitary sewer infrastructure,” the City approved water and sewer rate increases for a ten year period.
Compared to the 115.5% jump in revenue available to spend, actual expenditures are up from $67,495,400 in 2013 to $91,509,700 in 2018 … only 35.6%.
As evidence of this revenue flood began leaking out, so did evidence that services were being over-billed. Pressure mounted for Mayor Ollie Tyler (and, now, Adrian Perkins) to come clean by way of audits and rate studies.
We now know a 2018 audit which Tyler publicly denied even existed, as well as a separate rate study, are still being withheld from the public. So much for any doubt that there is much to hide.
Against this backdrop, three lawsuits in Caddo District Court brought by local attorneys Anne Wilkes and Jerry Harper – The Harper Law Firm – are underway in various stages.
The first of these suits before Caddo District Judge Mike Pitman has been decided against the city. The class action targets an estimated $2.5 million in overcharged sales taxes since 2015, involving an estimated 6,000 local businesses.
The head of the Water & Sewer department, Barbara Featherston, admitted in a deposition that the “over collection” had occurred. Judge Pitman next rules on the amount of the over-collection, and what the City will owe in attorney fees.
The second lawsuit involves over-billing for some 55,000 residential sewer customers, likely involving $25-30 million. City ordinances set-out certain formulas to be used to calculate utility rate billing, particularly over winter months, and the formulas have for years been notoriously wrong, benefiting the City.
The third lawsuit targets the water and sewer “Customer Charge” on each bill, supposedly a flat fee for each user / address. The City has, instead, been hitting customers per meter, of which some commercial customers have as many as fifteen. The attorneys estimate overcharges in this category of some $20 million.
The scheduled water and sewer rate increase by the City will continue (at least) through 2022.
© 2019 Elliott Stonecipher … ALL RIGHTS RESERVED
1. City of Shreveport 2014 Annual Operating Budget, report page 436:
2. City of Shreveport 2019 Annual Operating Budget, report page 440: