Cobb county water department transfer amounts:
1998: $8.6 million
1999: $9.6 million
2000: $9.6 million
2001: $14.2 million
2002: $24.4 million
2003: $17.2 million
2004: $13.6 million
2005: $14.6 million
2006: $17.1 million
2007: $17 million
2008: $18.7 million
2009: $17.6 million*
2010: $17.6 million
2011: $18.8 million
2012: $16.2 million
2013: $17.2 million
2014: $15.5 million
2015: $14.4 million
2016: $12.8 million**
*this transfer was on top of $17.8 million in loans written off by the county.
**amount proposed in fiscal year 2016 budget
For the past 16 years, Cobb County’s general fund budget has been propped up by more than $240 million diverted from the county’s water department — cash used to cover general county services that otherwise would have been invested in infrastructure improvements or expansion of the water system.
The practice has exposed tens of thousands of water customers to increasingly higher water bills. While Cobb has ostensibly spared taxpayers from rising rates, critics of the practice call it a hidden tax.
Other counties think there is risk in the practice, as every dollar diverted from the water department is a dollar not spent on maintaining the system. Other metro Atlanta counties either abstain from taking from the water department or only take enough to cover services provided to the water department for human resources, facilities maintenance and accounting.
Cobb is planning to take seven percent of water department revenues in its next fiscal year, or $14.4 million.
Steve McCullers, director of the Cobb County Water System, acknowledged that the diversions have led to higher water rates.
“… If we transfer 7 percent of our revenues to the General Fund next year, then about 7 percent of next year’s rate can be attributed to the transfer,” he said.
County commissioners took a step toward eliminating the fund transfers earlier this week, when they passed a fiscal 2015 budget that reduced the amount of the transfer by $1 million.
The plan is to reduce the transfer amount by one percentage point every year until it is eliminated.
Lance Lamberton, president of Cobb Taxpayers Association, said the transfers amount to a hidden tax because water and sewer rates have had to increase to cover them.
“It’s a raid. They’re raiding one fund to pay another,” Lamberton said. “It’s a means by which the county government can avoid living within its means. It’s unconscionable … deceptive and unfair to rate payers.
“They’re playing a shell game with our money.”
Cobb’s water and sewer rates have gone up more than 50 percent since the transfers began, although McCullers says there are many reasons for that, including new environmental regulations and system expansions.
“I think that, historically, political leaders felt that an increase in water rates might be preferable to an increase in taxes, particularly since the resulting water rates were still less than pretty much all others in the area,” he said.
The transfers started in 1998, when a portion of them — $27 million — were used as loans to expand the wastewater and solid waste systems. But a majority of that money was never repaid and, in 2009, the county wrote off $17.9 million of the debt.
Diverging money from the water department is a controversial practice that isn’t embraced everywhere.
In Gwinnett County, revenue from the water and sewer departments are used exclusively to pay for those systems, said Joe Sorenson, a Gwinnett spokesman.
“It’s a business and the funds and the interest and the debt payments are all completely contained and balanced in those (budgets),” Sorenson said. “The rates we charge for water and sewer pay for those services alone.”
DeKalb County uses some water funds to pay for services it provides to the water system, such as human resources, facility management and finance. DeKalb’s transfer was less than 1 percent of water revenues this year.
“The general reason for it is to defray costs between departments that serve or facilitate the existence of (the) watershed” department, DeKalb spokesman Burke Brennan said.
And the city of Atlanta hasn’t engaged in that practice for several years, according to city spokeswoman Melissa Mullinax.
The Cobb County transfers started under former commission chairman Bill Byrne, who said they were necessary to expand the county’s solid waste and stromwater systems. He said the transfers are legal, but shouldn’t not have been expanded.
“It turned into a system whereby the BOC became dependent upon the transfers to balance the budget,” Byrne said.
Lee did not return phone messages seeking comment on the water transfers. But each of the commissioners have expressed a desire to eliminate the transfers during this year’s budget process.
Commissioner Bob Ott initially said he planned to vote against the budget because the transfers were not being eliminated quickly enough. But Ott ended up voting in favor of the budget, he said, because he wanted to support the $3 million increase in police funding.
But Ott agreed that the transfers amount to a hidden tax on county residents.
“By transferring money from the water department, it forces us to raise water rates,” Ott said.
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