Water LTE - Thetford
8/19/2017: Spotlight: Higher city taxes? Fewer services? Buy water company instead?
By Gale Thetford
Peoria Journal Star Letter to Editor
The Peoria City Council is facing dire budgetary challenges. From my time as a council member, I empathize with the difficult choices facing the Council, especially with the city budget being squeezed from many sides — a bankrupt state, an uncertain local economy, uncontrolled pension costs, declining reserves, and already high local taxes.
I remember agonizing over how to maintain operations and city services even when there was no budget deficit. Now City Hall has a $7.9 million shortfall.
The Journal Star editorial of Aug. 10 outlined the city’s financial troubles accurately. There aren’t any good choices for a city also facing increasing demands for police protection, road repairs and other important services.
In looking for a way out of this budgetary morass, the Council should avoid higher taxes on Peoria homeowners, shoppers and businesses. The Council must be creative. The city’s financial future depends on it.
With that in mind, I was heartened to see the Journal Star encourage the Council to pursue a due diligence examination of the private water system. Despite fear-mongering by Illinois American Water Co. (IAWC), a municipally owned water system could generate significant revenue for the city immediately after its purchase and especially into the future. After bonds are paid off, water revenues could supply millions to the city’s bottom line. Other cities use income from their public water systems to fund services and keep taxes low. Peoria could, as well.
There is no question of profitability in the water system. The Illinois Commerce Commission authorized IAWC to earn a rate of return of nearly 10 percent, which should be used to improve city services and infrastructure, not the needs of other IAWC communities.
It is important for Peorians to know that even though IAWC repeatedly says the water system is not for sale, the 1889 franchise agreement states that IAWC must sell to the city if the Council votes to exercise its option. It has been upheld by the court.
It’s impossible to predict the future. The only way to know if purchasing the water system is a wise investment is to initiate an appraisal as part of a formal due diligence process. The Council can’t afford to wait to undertake this task and determine if a buyout is financially feasible. The budget shortfall demands action now.
It would be political malpractice for our city officials to raise taxes or cut services without first exploring this option for new revenue. A public water system offers the possibility of a long-term revenue stream that could launch Peoria toward fiscal stability. Shouldn’t the Council at least investigate that? This Council has an opportunity to leave a real legacy to its constituents.
Gale Thetford is an attorney and former member of the Peoria City Council. She lives in Peoria.
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