Dear SedonaEye.com, Sedona Mayor Rob Adams and Vice Mayor Hamilton, and the Sedona City Councilors,

I will not be voting in the upcoming election for any incumbent who approves the “Notice of Intention” to raise wastewater rates.

As you know, a large number of Sedona property owners, businesses, and retirees on fixed incomes are rotting financially. So, why are every one of CDM’s vampire Wastewater Rate Study’s rate recommendations completely out of touch with the realities of today — hardship, hunger, joblessness, foreclosure, bankruptcy and NO OPPORTUNITY?

The brutal increases proposed by CDM at a time when our sewer rates are already higher than Flagstaff’s, Cottonwood’s and Camp Verde’s will suck the few dollars that are left out of middle class and poorer Sedona property owners and renters (increases get passed on to them). In checking with Yahoo! Real Estate, I see it lists 310 foreclosures in the Sedona area today. Why would City Hall want to drive more Sedonans to the brink financially? Where is the economic justice?

I am beyond concerned about the City’s addiction to spending, its enormous debt of over $68 million, and the $55.8 million related specifically to the WW system. The debt behemoth was created without the consent of the electorate and has led to much deficit spending and fiscal imprudence at City Hall. Rate payers are not responsible for the fact that City Hall’s spending is out of control. Instead of higher sewer fees, we need City Hall to clean up its financial act.

I advocate paying down the debt and freeing the City of debt service ASAP. According to the WW Rate Study, this fiscal year a horrendous amount, 53% of Wastewater Fund monies — $721 per ERU per residence per year — goes to service the City’s debt. Meanwhile, there are no plans to deal with the debt overload burden nor to end future debt service payments. The latter will continue for over one decade at approximately the $6 million level — even after the two bonds due and owing on 7/01/2012 (for a total of $16.8M) are paid off in full; this is a result of the very unorthodox way the payment schedules for four of the excise tax bonds are structured.

To free our big-spending City and its rate payers of debt service, I recommend downsizing City Hall’s bloated government by: (a) terminating the RoadRunner, (b) ending subsidies for the Chamber and non-profits, (c) eliminating the Rec & Parks Dept and Commission as well as the Arts & Culture and Housing Commissions; (d) reducing City staff to the year 2000 level; (e) stopping the sewering of areas with septic tanks, and (f) forgoing the expensive Recharge Project. The City of Sedona could then begin retiring its sales tax bond obligations as soon as the upcoming fiscal year.

Specifically: In FY 2010/11 pay off the Series 2007 Excise Tax Revenue Bonds, $17,915,000, maturing 7/01/2027;

In FY 2011/12 pay off the Series 1998 Wastewater Municipal Property Corp Excise Tax Bonds, $16,105,000, maturing 71/01/2027;

In FY 2012/13 (in addition to the Series 2002 and 2004-1 Bonds expiring on 7/01/2012) pay off the 2005 Excise Tax Revenue Bonds, $11,305,000, maturing 7/01/2019 as well as the Water Infrastructure Finance Authority of AZ Series 1996 Bonds, $2,000,000, maturing 7/01/2015; and,

In FY 2013/14 pay off the Series 2004 Excise Tax Bonds, $18,415,000, maturing 7/01/2019.

Via this, or a similar manner, the largest component in the Wastewater Rate Study attributable to residents–the Debt Service of $721 per ERU per residence per year ($6 million annually)–would be zeroed out in four years. Likewise the debt service charge the CDM study proposes to heap on business properties would end. And the City could save approximately $6 million per year for each of the last six years of the WW study.

By the way, how is it possible to have faith in CDM’s Wastewater Rate Study?

In Eric Levitt’s 3/25/2009 Council Agenda Communication re: ongoing and future wastewater-related matters, Levitt indicates that “Some major changes over the last three years have led to increased maintenance”; and, “At least $20 million of the current improvements anticipated for the wastewater system were either not anticipated in the original financial planning or not anticipated at today’s cost levels” and “Costs have been escalating at 20% to 30% per year….”.

Given these money-pit circumstances, even with sky-high sewer rate increases, how will the reductions in sales tax $$$ to the WW Fund enable the City to set aside the reserve of $6 million per year as well as cover the debt service payment AND ongoing capital and maintenance costs? Since the long-term financial problems of the Wastewater Fund remain unaddressed, how long will it be before a City Property Tax is necessary? Two years? Three years?

In my opinion, CDM’s so-called wastewater financial plan enables the gutting of the Wastewater Fund of the sales tax revenues needed to function properly and provides City Hall with the means (1) to continue overspending and (2) to dump its downstream WW financial problems on property owners.

The City is in a spending crisis!

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