Sunday, May 8, 2016

Aubrey Water System Expansion Vote Details

I have recently taken some criticism for not supporting the over 5 million dollars of debt for the Aubrey water system expansion. Much of this criticism is based on limited information or half-truths, so I feel the need to set the record straight on why I voted in the manner in which I did. I also think it is important to understand what my real position was on the matter. 




There are multiple aspects of this, and there are many possible consequences no matter which path we would have chosen. Many of the arguments that were brought up, were valid, and that's what makes decisions like this so difficult. However, my view on this was that it was blown out of proportion likely to distract the Aubrey citizens from other matters of importance (wagging the dog). We are currently in silly season, or election season as some people call it. Therefore, those trying to maintain their power need to have some sort of distraction to keep the focus off of their poor decision making.  I have purposefully waited until after the election to release this. 

One of the things that prompted me to run for local office again, was the fact that Aubrey was carrying such a large amount of debt for such a small town. There are different perspectives on debt and while I understand that there has to be some debt, excessive debt can and will hamstring all cities, but cities of our size are particularly vulnerable. With this bond package Aubrey essentially doubled its current debt. Unfortunately, I do not believe that this bond package will completely solve our problems. 

Both the Aubrey property tax and water rates are higher than cities of similar size and complexity. While not significantly higher, we are certainly at the top of the charts in both of these areas. Under the current rate plan, water rates will increase at least 20 percent over the next 5 years. But the main question that I had, was whether we needed this much at this time? 

I am certain at one point in the conversation we were told our biggest problem was storage capacity, more specifically ground storage. Apparently our water wells are not currently producing at full capacity. Therefore, we may have gotten by in the short term with spending $ 500,000 instead of $5,000,000.  This would have been a safer option, and let us see how the growth was going to pan out before we made the larger investment.  However, this question was never fully answered and without support in questioning this, we'll never know if we needed this much right now.  Instead, there was an artificial crisis created that was meant to scare everyone into supporting the additional debt, and it has worked.

One reason that I was so concerned about this debt, is that just prior to the last recession, the city spent a significant amount of money anticipating rapid growth that never came. Consequently, just a few years ago, the city was borrowing money to make payroll for our city employees. Now, most experts believe we are on the cusps of another recession, which could certainly slow growth in this area. Will it be more severe than the last recession? Who knows? 



It is also my understanding that we took out more money in bonds than we needed to make the bond payments for a period of time. The initial discussion stated that we needed 5.1 million dollars for the project. However, we were taking 5.5 million dollars in debt to have a $400,000.00 reserve fund to make the payments for the first five years. Therefore, we were already admitting that we cannot afford this at this time. If there is a burp in the economy over the next few years, water bills and/or taxes may have to increase even more to meet the demands of the debt.  The total number in the end for this package was around 5.3 million dollars. 

When this discussion first came up I asked staff to provide me with the total debt that we were carrying on the water/wastewater system as well as the total value of our infrastructure. At this time staff estimated that we owed 2.7 million dollars of debt and the system was worth 5.8 million dollars. However, a few short weeks later the system was worth over 7 million dollars and we owed a million dollars less than they had stated.

See documentation here:



I will never claim to be an accountant or a financial expert. However, when staff was explaining this, they brought up the 73% number when talking about our debt/assets ratio. If you do the simple math, our system would have to be worth over 7 million to take out 5.3 million dollars of debt and still maintain the 73% debt ratio. This ratio plays into the city's debt rating (the number we need to be at was 75%, so we’re just below that after the recalculation of debt and assets). So my theory is that we only took out 5.3 million dollars of debt because that maxed out the credit card so to speak. And we had to figure out some way to make the water system gain over a million dollars in value over the last few months to even take out this much.

There was another piece of information that was disclosed just prior to the vote on the bond issuance and that was that we had not secured the easements or property needed for this project. What wasn't said was that the area where we're planning for some of this infrastructure is actually outside of the corporate limits of the town, and therefore in the CCN of Mustang Special Utility District (SUD). Therefore, I do not believe the city can utilize eminent domain to obtain the easements for the needed infrastructure. So in short, we may need a lot more money to complete this project than we have. History always tells the real story, so we will see if I’m right in a few years, but I’m guessing we will need a couple of million dollars more for this project, which will of course be more debt. 

I also don't believe there was open and transparent government with this bond. I would have rather seen it go before a popular vote of the people. Personally, I think any expenditure of over a million dollars should go before a popular vote of the people.  However, the administration knew that the chances of it passing a popular vote of the people would have been more difficult. But to quote them, they didn't want to have to educate the public, although that is who they're supposed to represent.



For these reasons, I searched for alternative options.  In a perfect world I would have fully supported this expansion, but due to the mistakes of the past, we’re definitely not in a perfect world. One option was to develop a relationship with Mustang SUD. This relationship could have had several variations. I spent a considerable amount of time and effort exploring these options with no help from staff. However, none of these options were ever seriously explored. 

One of the options on the table was to completely get out of the water business, and sell the entire system to Mustang SUD. This would have erased current debt and prevented further debt as well as putting a couple of million dollars that could have been used for the horrible streets and gotten the city back on its feet financially. However, we were realistically a long way from this option, and I was never sure this was the best option for the city, and even more doubtful that an agreement such as this would have ever came together. I was however hoping we'd look at all options before doubling the city debt, but we did not. 

Probably the most offensive part of this discussion was the fact that we have not met our responsibility to provide adequate sewer service to some of our current citizens. So we spent over 5 million dollars on new infrastructure for future citizens when the existing system needed vital repairs. We spent over 5 million dollars, when some of our citizens have raw sewage bubbling in their yards when it rains due to the poor infrastructure.




During the April 19, 2016 public meeting, this discussion was framed much differently though. This was framed around whether to sell the system or not, when the real discussion was whether to fix the current system before we expanded or not. However, we essentially told our existing citizens they're not our priority, the ayes had it and the motion carried. We told our current citizens that they don't really matter to the city, growth is the only thing that really matters. Not only have we told them that we don't care about their issues, we portrayed them as being villains and trouble makers for daring to complain about the failures of the local government. We vilified the victims, which is deplorable. However, those doing the vilifying would certainly see things much differently if they had deal with the stench of raw sewage at their homes during heavy rains. 

Just to be clear, the additional 5+ million dollars of debt bothers me. But the real problem is the fact that we didn't repair our current sewer system, our true and direct responsibility, and I'm doubtful that we can even get the money to repair it now if there was a will. So those who have had to deal with the horrible sewer issues for many years, will continue to have to deal with half-ass repairs and band-aids.  As previously mentioned, I believe the credit card is maxed out. So it is unlikely that we will ever be able to do the responsible thing and fix the current sewer system, and this was what disappoints me the most about this situation.  I hope that others will share my compassion for the current Aubrey citizens, and help me in making sure we somehow repair the dilapidated sewer system, and treat all Aubrey citizens with dignity and respect.   

3 comments:

  1. It is a whole lot easier to take risks with other people's money. These fools will just leave when this mess goes south.

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  2. It is true for some that it is easier to take risks with other people's money. But I do not fall into that. While on Council, I tried very hard to think about the impacts of these money decisions. I know if water bill goes up five dollars, that is going to push some folks right over edge. For some, that five dollars is the milk for their breakfast, or could be the copay for their heart medication

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  3. Not sure how they plan to pay for this debt, maybe like the national debt they don't plan to pay for it. But I bet the water bills are going to go up more than five bucks.

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