October 21, 2003
The Honorable Sonny Perdue
Governor
203 State Capitol
Atlanta, Georgia 30334
Dear Governor Perdue:
I am writing as a follow up on our previous discussions regarding the federal court mandate to repair Atlanta’s dilapidated water and sewer system. The cost of this mandate is approximately $3+ billion. As you know, this crisis affects not just the residents and businesses of Atlanta and Fulton County, but, indeed, the entire metro region and those who live and work downstream on the Chattahoochee River.
Unless we receive assistance, water and sewer rates will increase dramatically beginning January 2004. Residential, commercial and wholesale customers will receive a 45 percent increase in 2004, another 45 percent increase in 2005 and an 11 percent increase in 2006, 2007, and 2008.
The City is shouldering most of the economic burden of this mandate, having already committed $1.6 billion of our own resources.However, this is a local, state and national crisis which requires a local, state and national solution. As such, we need your support in relieving the burden that will be imposed on our families and businesses. Specifically, I request the following:
- · The State of Georgia and the General Assembly approve grants to the City of $50 million for 10 years;
- · As Governor, personally assist me and our lobbying team to urge our U. S. Congressional delegation and the Bush Administration to provide $1 billion in appropriations to the City for relief from this mandate;
- · Support the Georgia Municipal Association (GMA) proposed legislation that will allow a Municipal Option Sales Tax (MOST) election at the earliest date possible. This action will permit the people of the City of Atlanta to vote on how to fund part of the impending rate increase assuming that Fulton County continues to refuse to call a Special Purpose Local Option Sales Tax (SPLOST).
Along with a commitment from the state, a partnership with the federal government is entirely justified. The City must, and will, meet the requirements and deadlines imposed under the Consent Decree negotiated by the federal government. However, we feel financial help is warranted since several other cities have faced similar challenges and have received federal assistance in meeting those challenges. For example, San Diego, California has received over $500,000 in direct federal assistance over the past several years through a $1 billion authorization. Boston, Massachusetts received approximately $1 billion toward rebuilding its system. Anchorage, Alaska has received $200 million of a $500 million authorization, and the state of Texas received an authorization of $1 billion, of which $250 million has been appropriated to date.
Unless Atlanta receives some state and federal assistance, no other city in our country will have been treated so harshly. In the meantime, I will continue to work with the Fulton County Commission to persuade them to give the people a voice in funding options for the rate increases.
Addressing this crisis does not only determine whether we have clean water in Atlanta, it impacts the entire state. For example, fully 45 percent of our customers reside in surrounding jurisdictions, including Fulton and Dekalb Counties. Cities, Counties and citizens in every Congressional District but one are directly affected by water quality improvements that we are achieving in the Chattahoochee/Flint Rivers and the South/Altamaha River Basins. Water resources of the rivers will benefit from our water infrastructure improvements.
Governor, Atlanta’s economy and its people are at risk unless Fulton County, the State of Georgia and the federal government demonstrate leadership and do their fair share to assist our rate payers. I will continue to do everything in my power to lower the rate increases and relieve the hardships imposed on our families and businesses.
My staff will be contacting your office soon so that we might work directly on the specific ways the state can assist its citizens. In the meantime, please do not hesitate to contact me if you have questions or concerns.
Sincerely,
Shirley Franklin
ATTACHMENT
ACTIONS TAKEN BY CITY OF ATLANTA TO SECURE FUNDING
FOR WATER INFRASTRUCTURE IMPROVEMENTS
10/20/03
The City of Atlanta is aggressively pursuing ways to increase revenues for water infrastructure improvements and to cut costs:
INCREASES IN SEWER RATES - Since the mid-1990s, the City has sold bonds raising $1.6 Billion for making improvements to water and wastewater infrastructure. To support these initiatives, the City already has raised sewer rates approximately 250%. In order to help raise the additional $3.0+Billion that is required to satisfy its obligations, the City is facing another tripling of sewer rates as determined in the rate study that supports the rate proposal under consideration by the City Council.
Sewer Rate History - The City of Atlanta has increased sewer rates significantly over the past ten years to the point that they are among the highest in metro Atlanta and in the Nation.
|
Year |
Sewer Rate (per CCF, 100 cubic feet) |
% Increase |
|
1994 |
$1.90 |
17.24% |
|
1995 |
$1.95 |
14.70% |
|
1996 |
$1.95 |
0% |
|
1997 |
$2.29 |
17.40% |
|
1998 |
$2.55 |
11% |
|
1999 |
$2.97 |
16% |
|
2000 |
$3.31 |
11% |
|
2001 |
$3.40 |
3% |
|
2002 |
$3.93 |
15.60% |
|
2003 |
$4.45 |
13.20% |
|
2004 * |
$5.03 |
13% * |
*Minimum: the rate study calls for a 45% increase in 2004.
SEEKING APPROVAL OF SPLOST (Special Purpose Local Option Sales Tax) - In the 2002 legislative session, the City sought and received approval from the Georgia General Assembly to authorize the Fulton County Commission to call a referendum on the SPLOST. The City has twice attempted to get permission from the Fulton County Commission to allow voters to vote on a special sales tax dedicated to water and sewer infrastructure projects.
IMPROVEMENTS IN COLLECTIONS FROM RETAIL CUSTOMERS - The City is stepping up collection efforts, attempting to increase collections by 3-4%, meaning an additional $5-8Million in revenue per year. Efforts include terminating service on delinquent accounts, prosecuting theft of water service, placing liens, turning over accounts to the credit bureau, and using a collection agency to recover outstanding debts.
CREATION OF NEW STORMWATER UTILITY - The City plans to establish a new Utility and seek necessary changes to City ordinances in 2004/2005. Service charges would be established to raise amounts ranging from $5-12Million annually from contributors to stormwater runoff.
INITIATIVES WITH GEFA (GEORGIA ENVIRONMENTAL FACILITIES AUTHORITY) - The City is seeking participation in low interest loans from GEFA, the state agency that administers the Clean Water State Revolving Fund. The goal is to obtain $50M annually.
SHARING RATE INCREASE BURDEN WITH INTERJURISDICTIONAL PARTNERS / CUSTOMERS - The City is enforcing terms and conditions of the sewer service agreements with other jurisdictions more aggressively, including the recovery of Operation & Maintenance costs related to the collection system. This should boost available funds for capital improvements and O&M by several $Million annually.
REDUCTIONS IN OPERATING COSTS - The City is reducing overall operating costs throughout the Department of Watershed Management, including outsourcing and use of advanced technology.
INCREASES IN OPERATING EFFICIENCY - Through recalibration, repair and replacement of meters, the City is seeking to maximize revenue through better metering and billing practices.
PURSUING STATE LEGISLATION - The City’s State legislative plan for 2004 includes initiatives that would reduce cost of borrowing and provide other operating benefits to Atlanta and other cities throughout Georgia.
POTENTIAL DEBT REFUNDING - The City is reviewing potential to refund/refinance existing debt and save on debt service costs.
APPLYING FOR GRANTS UNDER EXISTING FEDERAL PROGRAMS - The City is pursuing all available Federal/State grants relating to watershed activities (Clean Water Act.