$200 surprise
1/23/2013Whether or not a so-called deposit of $200 on new water service accounts is warranted, Toledo Mayor Mike Bell again has made it tough on himself by not leveling with City Council and the public. Mr. Bell complains that his critics continue to stab him. Unfortunately, he keeps handing them a sword with policies that favor secrecy over transparency.
Last week, councilman Rob Ludeman blasted the administration for imposing the $200 deposit on new homeowners without warning. A Realtor, Mr. Ludeman said the change would hurt the still-recovering housing market. At his request, City Council President Joe McNamara has scheduled a hearing on the matter for Feb. 4.
The Bell administration can impose the deposit without council approval. But ignoring the council, and the constituents it represents, wasn’t smart.
Given the repairs needed for Toledo’s aging water and sewer system, the city will need to raise water rates again soon. To his credit, Mr. Bell has recognized the need, after years of neglect, to invest in the water system.
City water rates increased 9 percent each in 2010, 2011, and 2012. The increases were needed for federally required upgrades to the city’s sewer and storm-water systems. The city also has become more aggressive in going after unpaid water bills, increasing shutoffs, and prosecuting people who steal water.
Still, the administration will need all the credibility it can get to raise enough money to repair and upgrade the system. The mayor must explain what he’s doing, and why.
In this case, Mr. Bell failed. Labeling the $200 fee as a deposit is disingenuous: The $200 is credited toward a customer’s final bill when service is terminated, which could take years or even decades.
Meanwhile, owners collect no interest and the deposit decreases in value over time. Properly used, deposits should alleviate the cost of delinquencies, not raise more revenue for the city.
A better policy, more in line with how deposits are normally used, would be to hold the money for a period — maybe a year — and then allow owners to recover their deposits if they have stayed current on the bills.
As it stands, buyers of multiunit projects with multiple water meters will incur considerable costs, because the $200 deposit is assessed per unit. Landlords probably will consider the deposits a user fee and pass the additional costs to their tenants. Many low-income renters will not be able to afford the increases.
Mr. Ludeman also wants to know, properly, whether the administration has imposed the deposits across the board, or in a piecemeal manner.
To mitigate the damage, Mr. Bell should cooperate with council members and give them, and the public, the information and answers they seek. Otherwise, the administration will find it even harder to move forward with unpopular, but necessary, water-rate increases.