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[McCook Daily Gazette]
McCook, Nebraska ~ Thursday, May 15, 2008
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Increased fees just another tax


Saturday, September 1, 2007
Yesterday in a local hardware store I overheard a customer asking for a product to "Kill all the grass, everything, in my yard!"

He further spoke that water rates in McCook had increased to where he could no longer afford a green lawn. Recently Robert Yost, whose letters I always enjoy, wrote in the open forum that he no longer waters his yard and if it rains his weeds will be green and if no rain it will all be brown. 

Many in McCook have converted to buffalo grass with its low water need. Some even have yards of stone with no water required.

What is happening, what is the problem? Is this what we want McCook to look like?

When one attends Council meetings the term "enterprise fund" is bandied about. City Manager Kurt rightly states that "water" is an enterprise fund and the rates have to be adjusted so that water pays for itself. Kurt is correct, enterprise funds are a required accounting practice for cities our size in Nebraska.

Basically an enterprise fund is set up to look like a stand-alone business. All expenses are accounted for and revenues are adjusted to equal expenses. Supposedly it is a non-profit, break even arrangement. On the expense side some of the costs of city staff are allocated to water and then there is a huge loan to be paid down. Water lines that have exceeded their useful life need to be replaced but unfortunately it is also catch-up time there to take care of past neglect.

But how do you make it come out even when you have to forecast water usage at budget time and then Mother Nature gives us lots of summer rain? More rain means less consumption than was predicted when we were in the middle of a long running drought.

On the expense side, salaries are set in advance and have to be paid. The price of salt, a major expense in our new gold plated treatment plant, has gone up, up, up in part due to fuel to ship it here. The State of Nebraska has contributed by dithering and not making a decision, yet, to allow us to dispose of the brine in our completed deep disposal well.

So what is the answer? Do we raise rates to generate the needed revenue? That concept doesn't work very well in the retail business where raising prices cuts sales, end result revenue decreases. People are smart and will figure out that if a lawn is too expensive, the cost of water to keep it green can be eliminated.

Several years ago, in the era of John Bingham, the hose plant, McCook's largest water user, was facing a large increase in water rates and decided how to avoid the problem. They drilled their own wells and modified their system to reuse the cooling water in their industrial process. I was on the council at the time and asked Bingham to attempt to renegotiate with the management of the hose plant to find a rate that was acceptable to them so that McCook could keep that revenue stream going. Bingham didn't listen or didn't grasp the problem or bungled the attempt so McCook lost out and the hose plant now produces its own water and no revenue to the City.

Residents of McCook have the same option; they can drill their own well and close their tap to the City's water lines. I know of at least one resident who has done exactly that and, of course most of the McCookites living just outside the city limits have their own wells and little desire to pay McCook water rates.

Beware though, private wells are expensive to keep and some areas simply don't have adequate underground water.

There is another way. City Manager Kurt has intimated that he will propose to the Council to keep the water use rate the same for next year's budget. That should satisfy those users who want to cut their water use. Then to generate the necessary funds, Kurt proposes an increase in the "ready to use" fee. If you are hooked to the city's water system you pay the monthly fee whether you use any water or not. That is a good solution and should work. However in my mind it is just another tax increase to go along with the new one-half cent sales tax the city is proposing and the new tax property tax levy on the Republican River to send water to Kansas.

Then, too, we could use the present sales tax to pay down the huge water plant loan and eliminate that expense from our water rates. But then more taxes that should make people want to stay in McCook. Not.

That is the way I see it.



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