Steve Mensing, Editor
♦Recently NC House Bill 708, “Public Enterprise Systems/Use of Funds” has incurred much discussion among legislators and citizens concerned with local government “shell games”. Municipal government shell games affect utility and fee payers often without their awareness until they notice their utilities and fees being hiked. “Robbing Peter to pay Paul” often goes unchecked in some municipalities unless concerned citizens scrutinize municipal budgets and the exchanges going under the radar between water and sewer funds and pet municipal projects. Failing municipal projects, such as fiber optic networks, can siphon millions from reserve funds without much notice. Some small cities are notorious for claiming their “pet” projects are successful after infusions from enterprise funds. Quite often this “borrowing” with interest is never paid back to the general funds. It is said that some municipal governments view enterprise funds as unlimited credit cards. A few municipal governments are not above helping themselves to monies from neighboring towns’ water and sewer funds.
HB 708 would create a valuable law preventing cities and counties from transferring monies from local water and wastewater enterprise funds to any other funds. Under the proposed bill, revenue to an enterprise fund could only be employed to cover operating costs and debt service. HB 708 states that remaining revenue should only be used to lower water and sewer rates or pay additional debt service.
Spencer alderman and attorney, Jeff Morris wrote about HB 708 in a recent email: “I believe this legislation will be the most popular of all legislation this year among our constituents. Most NC municipalities are not water/sewer towns, and our residents are mad as hell about the rising rates, then siphoning off of “profits” and reserve funds to fund spending completely unrelated to maintenance, infrastructure expansion, or the management of the utility. We really need to put a stop to this abusive practice. And state restrictions are the only way to do this.”
Bill 708:
http://www.ncga.state.nc.us/Sessions/2013/Bills/House/PDF/H708v0.pdf
