From JAMES HOULE
To the Ukiah City Council
March 7, 2012
Re: Honeywell’s $3 Million Dollar Proposal for New Water Meters and Conference Center Renovation
Dear Council Members:
A review of the Honeywell proposal dated March 7, 2012 shows that they expect an increase of 6.12% in revenues after the installation of more accurate water meters and that this will net the City $276,845 per year. The total cost of the water meter replacement and leak detection project ($2.5 million) would be paid by we the consumers through higher water service charges. Should the smart water users, mostly small homeowners and renters, elect to reduce water consumption through modest conservation measures in the home, then the extra revenue Honeywell predicts would disappear and the City would be faced with paying off these municipal bonds out of general funds.
The companion proposal would cost $592,000 to upgrade the Conference Center with cleaner carpets, more comfortable chairs, and a commercial kitchen that would allow hosting banquets cooked right there on the premises! This taxpayer debt would supposedly be paid back by avoiding the rental of commercial kitchen equipment that costs $62,400 per year. (I have never heard of “rent-a-kitchen” but that’s what Honeywell says and they’re a major Pentagon contractor after all!) What would happen if the kitchen was upgraded and no high rollers elected to have banquets there? What would happen if these happy conventioneers elected to have their banquets catered by Patrona, just a block away, or from the soon-to-be-refurbished McDonald’s a few blocks down Perkins Street? Again, no revenue stream to pay off the bonds.
The City of Ukiah took on two municipal bonds in 2010 totaling $8.43 million at interest rates that will reach 5.75% to 8.0% at maturity. These high interest rates reflect the City’s poor credit rating and declining property tax revenues as the economy staggers and homes go “financially underwater”. Hundreds of home owners have already experienced or are currently threatened with foreclosure in these dire times. To burden taxpayers with $3 million in new indebtedness for the ephemeral savings predicted in Honeywell’s proposals would be the height of irresponsibility.
I have not heard anything this funny since Robert Preston as the “Music Man” conned River City into buying band uniforms to prevent the youth from falling into sin and corruption at the local pool hall.