In a recent Ashland Tidings article, Ashland city officials are quoted as saying that “the costs for building a new water treatment plant are going up but residents won’t see their water bills rise by more than 4%.” Either the reporter misunderstood, or city officials aren’t being candid.
Ashland’s water rates, surcharges and fees have already increased more than by 150% over the past 10 years. Now, in addition, water rates are budgeted to rise 4% per year during the 2019-2020 biennial budget. The story of the proposed new water treatment plant is frightening in that it underscores how out of control city costs and spending have become.
In a Tidings article just last October, Ashland Public Works Director Paula Brown said the budget for the entire water treatment plant project was $23.3 million. She added she “was relatively confident that customers’ water rates would not have to be adjusted to accommodate the new plant because they have been raised in past years in preparation for the new plant.” Apparently, that wasn’t true either.
In Brown’s presentation to the Budget Committee this year, the estimate went up from $23 million to $32 million. In the last capital improvement plan, it rose further to $34 million and now is estimated at $36 million with just 30% of the project design complete.
Within a 10-month period and with so much experience and expertise in the Public Works Department, how could the cost for the plant increase over 56%? Actually, this is not unusual — consider the fate of other capital improvement projects (CIP’s).
TAP, the Talent Ashland Phoenix water line project, was deemed an essential public works project because it allowed drinkable water to flow to Ashland during times of drought. In the 2012 Water Master Plan, the estimate to complete the project was $2 million. Costs based on the last budget have now exceeded $12 million. It’s never been used to date; the mayor and council no longer consider drought enough of an emergency to use TAP. We have a $12 million asset that will only be used when the city tests the pipe.
The TID or Ashland Canal project was initially budgeted at $1.1 million. This is undrinkable water, only accessible for five months during the summer. It’s designated as Ashland’s secondary water source despite our access to year-round drinkable water via TAP. Now, cost estimates for this project have exceeded $4.3 million before any project impact studies have been completed. Yet, the previous public works director argued in a 2016 AWAC meeting that we should use TAP first because once you add the costs to treat TID water, TAP is cheaper.
Poor planning and cost estimation is not just a problem for water-related projects. In a 2016 study, it was determined that the cost to “seismically fix” City Hall would be $1.6 million. Recent estimates for City Hall now range from $7.5 million to $19 million.
Is the dramatic cost inflation of capital improvement projects a result of incompetence or done by design? Is there perhaps a strategy here where projects receive low estimates to gain initial approval and then, over time, city officials gradually increase them because Ashlanders are no longer paying attention? Like the frog in the frying pan — if it’s hot, the frog jumps out immediately, but if the heat goes up gradually, the frog will sit in the pan until it perishes.
It’s always been easy for Public Works to move the project cost goal posts over the years. Despite attempts by several members of the Citizens Budget Committee to pin down Public Works, there has been little if any support by our mayor or council to hold the department accountable. The mayor and council have not asked the critical questions about skyrocketing costs for projects and there are no repercussions when costs exceed initial low-balled estimates.
Public Works is Ashland’s Achilles heel. In the budget just passed, Brown said we can no longer wait to go ahead with Public Works CIPs projected to cost a quarter of a billion dollars over the next 20 years. Remember, this estimate comes before the inevitable project cost inflation and cost overruns. How can Ashlanders possibly afford this?
Of course, we must do projects, but only ones that are truly essential and not just attractive ideas. Our elected officials must start asking critical questions to identify these projects, find cost-effective alternatives where possible and hold Public Works’ feet to the fire on project cost estimates.
Let’s not perish in the frying pan, Ashlanders. Let’s demand accountability and ensure that the unsustainable spending stops because the future of our city is at stake.
Susan T. Wilson is treasurer of Ashland Citizens for Economic Sustainability.