Council members Mike Sullivan, Oliver Pennington and C.O. Bradford voted against the plan. Pennington, Bradford and several council members who voted for the increases expressed concerns that the rate hikes would violate city charter provisions limiting annual rate increases to a maximum of the combined rate of inflation and population growth.
City Attorney Arturo Michel and Mayor Annise Parker said the increases would not violate those charter provisions, passed by voters in a 2004 election, because the increases are vital to the health of the city’s water sewer system. Provisions exist in the charter, Michel said, allowing for increases to exceed those limits if they are necessary to meet bonding and contractual requirements.
Pennington, a former partner at Fulbright and Jaworski specializing in municipal finance, said the legality of the rates would, in all likelihood, be decided by a court, suggesting a lawsuit against the city for the increase was likely.
Which is just another reason why I opposed both of those revenue cap propositions. How stupid is it to potentially be in a position to not be able to pay for a basic infrastructure item like water because of somebody’s ideology? I’m sadly certain that CM Pennington is correct and that the fate of this ordinance will ultimately be in the hands of a judge, possibly multiple judges. I just hope that in the end the city gets to do what it needs to do.
UPDATE: Today’s version of this story has more on the potential rev-cap lawsuit issue.
Michel said the city is preparing to pre-empt any lawsuits by filing a “rate validation lawsuit” that will seek a district court judge’s approval of the rate hikes given the language in the charter.
“To reassure everyone and make sure that there’s no cloud on our ability to go forward … we are going to go to a judge pre-emptively and say, ‘Bless this,’ because we don’t want to have any doubt for our bondholders that we can accommodate this rate increase,” Parker said.
I sure hope that works.