Monday, May 9, 2016

How close is Iron River to Bankruptcy?

The City of Iron River continues its unabashed
theft of tax money from the property owners.
This time, according to Page 7 of the May 4th
issue of the Iron County Reporter, the city is
reducing the fire hydrant rental fee to $5.

Property taxes include a component that adds to
land value based on availability of utilities such
as water and sewer. The tax money raised that
way is supposed to be transferred into the water
and sewer fund. The mechanism to do that is the
“fire hydrant rental” that until now was officially
$150 per hydrant. But even there the city has
been cheating for years. With 352 hydrants in the
city, the budget allocation was only $30,000, a
shortfall of $22,800 that has been made up by
increased water and sewer fees.

A paper written by George W. Fuller, a sanitary
engineer understanding public utilities, found
that for a town of 5000 people fire protection
contributes costs amounting to 75% of the total
water budget. With Iron River smaller yet, it
appears that the fire protection impact, that is
everything from determining the size of water
pumps, storage capacity, and pipe sizes, is a
greater percentage of the budget. I recently
met with the new city manager, David Thayer,
who asked, "what do you suggest we do, rip
out fire hydrants?" That's asinine, because if
you do that, you still cannot reduce the sizing
of pumps, storage capacity, and pipe sizes, the
significant aspects of the actual costs to the
system.But that's the sort of "political argument"
I've come to expect from local politicians who
seem to have trouble utilizing the God given
brains I experience in discussions with  more
sentient humans.

Adjusted for inflation, Fuller’s analysis
commands $1500 per hydrant per year in
today’s dollars. The city council wants to pay
a total of $1760 for fire protection costs in the
water system where the actual cost, following
Fuller’s guidelines, should be $528,000. The
city is stealing $526,240 out of the taxpayer’s
pocket, while forcing the residents to pay that
amount a second time in the water fees so the
council can waste more money.

Fuller's paper can be found on the internet at

Fuller goes on to say that municipalities
generally use another 10% of the water
budget going to public use consumption.
Some part of that is metered. How’s the rest
being paid by the City? Simple answer, it is
all smoke and mirrors lacking any legitimate
audit. I hate the fraud.

Given that the City of Iron River is willing to
rip off the taxpayers for what amounts to
relatively petty amounts, how far can they be
from having to declare bankruptcy? Why else
would they be going through these
convolutions, unless it is to conceal the failure
of the "ruling elite" of the city, and that means
the complete failure of the consolidation that
was supposed to save three communities from
the failures we now see in their full splendor
before us? Starting in the year 2000, when
consolidation was supposed to modify the
way local government operated, actually
nothing changed, and all the waste continued
less two municipal councils and that overhead.

It was years before the city even got rid of
duplicated machinery, and the insurance costs
for stuff they no longer even used. Instead of
laying off public works employees who
numbered too many for the consolidated
city, they kept them all,and then openly stole
water funds to pay their pensions almost up to
date. There went $150,000, and for what, a
number of people sitting around with no work
to do for years. When did it become legal for
a Michigan municipality to get into the
business of providing welfare benefits?

This is all disgusting beyond words.

Given the experience of the city of Flint, do
we dare invite the state to help straighten out
Iron River's mess?

The above is the Opinion of Bill Vajk with
a significant intermixing of provable facts.

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