Tuesday, February 23, 2010

PURB reprimands spending, then calls for more spending

On Feb 18, the PURB Water Subcommittee issued some budget recommendations to the Portland Water Bureau, and I'm having a mixed reaction to them.

On the one hand, the subcommittee recognizes rates are out of control, and that spending is inappropriate (sometimes inappropriately allocated, as in the case of transportation projects paid for with water bills). But this PURB subcommittee is recommending PWB spends $200,000 to have an outside consultant look at their spending. I sort of thought that’s what PURB was supposed to do, for free. Some of the language used to introduce this recommendation reminds me that the newest subcommittee member, Mr. Crean, once served on a taskforce to “investigate” privatization options for a water utility in Maryland. http://www.msa.md.gov/megafile/msa/speccol/sc5300/sc5339/000113/004000/004342/unrestricted/20071180e.pdf

Then there is the other hand, and the very poignant “conclusion” in this newest recommendation:

The current system for setting water & sewer budgets and rates has the systemic problem that it lacks effective checks and balances. This situation is made even worse by Portland’s commission form of government where each commissioner directly oversees a portfolio of city bureaus. The upside is that commissioners have more freedom to innovate. The downside is that there is minimal oversight of bureau operations by the other commissioners.

In our opinion this is a severe shortcoming when considering the utility bureaus because the commissioners have unlimited authority to raise rates to match spending for those bureaus. After noting that the PURB has unsuccessfully tried to deal with this issue in the past, we are now convinced that the current system cannot ensure that water services are provided to consumers at just and reasonable rates. We believe all of our concerns also apply to how the council handles BES. However, because we are the water subcommittee of PURB we have much deeper awareness of the situation with PWB.

For these reasons we are recommending taking steps to move toward a new process, with substantial checks and balances, for establishing budgets and setting rates for PWB and BES.