Petition would roll back rates for sewer

Crescent City Councilwoman Donna Westfall wants to turn back time by lowering sewer rates to what they were before the $42.5 million overhaul of the municipal wastewater treatment plant.

If she succeeds, city officials said Wednesday it could have calamitous consequences such as forcing the city to default on its loan with the state and file bankruptcy, or drastically cut into its $5 million General Fund to cover the plant’s $2.7 million annual debt payment.

“It’s pretty obvious that it could potentially have a devastating impact on the city’s finances,” Crescent City Manager Rod Butler said.

“This is no laughing matter,” City Attorney Bob Black said. “Really the fate and the reputation of the city are really kind of hinged on this.”

At Monday’s council meeting, Westfall presented city officials with a notice of intent to circulate a petition for a ballot initiative that would allow voters to reset their monthly sewer rates to October 2007 levels, when city residents paid $40.95 a month and county customers paid $30.95.

Today, single-family residential sewer rates are $56.70 a month for city customers and $47.95 for those in the county. These are set to increase over the next year to $69.70 and $60.95, respectively, to help pay for the sewer project.

In 2007, as the city planned to increase sewer fees, Westfall started a grassroots campaign called Citizens Against $42.5 Million Debt in an attempt to keep rates where they were. After she failed she ran for the City Council campaigning on wastewater treatment plant issues and sewer rate increase questions.

After she was elected, she continued to raise questions about the treatment facility and its associated cost to ratepayers, and started two recall efforts against some of her colleagues because she claimed they were ignoring her concerns about those topics.

In her latest action, which aims to allow voters to repeal the City Council’s November 2007 decision to increase rates, Westfall repeats many of the claims she has made in the past.

The proposed ballot measure states that the city failed to set aside funds for maintenance on the treatment plant, which led to its disrepair, and then it “schemed to place the burden on the backs of ratepayers.”

It also claims that proponents of the sewer plant upgrade “probably lied and misrepresented the facts when presenting their case before the public” to move ahead with the project, and they “continue to do so.”

There’s also a condemnation of last month’s decision by the City Council to censure Westfall, stating the action against her was “filled with lies, character assassination, half-truths and innuendos in an effort to have her stop questioning what looks like illegalities” concerning the wastewater treatment plant.

Like a current initiative to take fluoride out of the city’s water supply, Westfall’s attempt must follow certain procedures before it is put on a ballot.

The city attorney first must approve a ballot title and summary for the proposed initiative that voters would see if it makes it to an election.

Black said Wednesday he has about two weeks to do this under state guidelines, but hasn’t completed his analysis yet.

There are several issues he must look at, including whether the initiative to change Crescent City’s ordinances is constitutional because it would breach contracts to repay the wastewater treatment plant loan.

He said there’s also a concern about the phrasing of the proposed initiative because it contains several accusations.

“The thing that you have in front of you is not really a law, it’s a diatribe,” Black said. “So there’s a lesser question about whether or not that is something that can be legitimately put on the ballot and be a law that can be voted on.”

If Black approves an official title and summary and the initiative moves forward, Westfall would have 180 days to circulate a petition and collect enough signatures from registered city voters to put it to an election.

Under California Election Code, Westfall needs 10 percent of the registered voters in Crescent City to sign the petition to put her measure on the November 2010 ballot. As of May there were about 1,700 voters within city limits, meaning she needs about 170 signatures.

Should Westfall’s initiative make it to a ballot and voters approve it, Crescent City Manager Rod Butler said it could be a “nightmare” for the General Fund and could even lead to the city declaring bankruptcy.

Construction on the treatment plant is expected to be completed next year, and much of the money has already been spent. The current loan agreement is for Crescent City to pay back its debt at 2.4 percent over the next 20 years.

Butler said the annual payment for this debt is about $2.7 million a year, and if the city didn’t declare bankruptcy there would have to be a massive shift of General Fund dollars into the sewer fund to help pay for that. Considering the General Fund hovers around $5 million, he said there would have to be drastic cuts in other city services.

“There’s no way the status quo level of service could continue,” Butler said. “There would have to be some impact on public safety, by which I mean police and fire because they are by far the biggest chunks of the General Fund.”

There would likely be layoffs of city employees, reduced maintenance of parks and roads, and cuts in contributions to agencies such as the Chamber of Commerce, Visitors Bureau and Tri-Agency Economic Development Authority, he said.

It could also impact discussions at the state and federal levels that are under way to extend the city’s loan agreement to 30 years and eliminate its interest payments. These scenarios, Butler said, could save ratepayers in the long run and prevent sewer fees from increasing in 2010 as scheduled.

“It wouldn’t necessarily be the Donna Westfall fantasy of cutting back rates to 2007 levels, but it would have the benefit of reducing the future increases that are built in,” he said.

City officials are now researching their options to combat Westfall’s ballot initiative, possibly by litigating to  have a judge review the constitutionality of the measure.

Black estimated this could cost the city anywhere from $20,000 to $30,000 in legal fees. That’s not including what he’s already billed Crescent City for his dealings with Westfall’s various campaigns, including the recall efforts.

As a contracted attorney, he’s paid $189 an hour for his services to the city. So far, he’s cost the city $4,000 or $5,000 doing work on the recalls, and he plans to add another $2,000 or $3,000 to the bill just to analyze the ballot initiative.

Butler said there have been discussions about simply approaching Westfall and asking her to stop.

“Once we really have a good understanding of what the impact will be, I do think we’ll sit down to do a little convincing,” he said. “They’re so fixated on this goal that I don’t think reasoning will work, but we will try.”