Thursday, September 27, 2007

Pimpin' for Pinnacle

The City of Fayetteville is facing increased costs for providing water and sewer services, but the Mayor and his Budget Bureaucrats have an agenda beyond just paying for the cost of water and sewer expenses. They want residential customers to continue paying higher rates to subsidize the rates paid by big industrial users and thereby increase corporate profits.

Alderman Bobby Ferrell is the council member who supports this scheme, because he says those industries provide jobs in the community. The Fayetteville Economic Development Council and Fayetteville Chamber of Cowbirds paid Kathy Deck, director for the UA Center for Business and Economic Research, to do a study then get up and tell the water and sewer committee that industries have a big economic impact. No one really doubts that; the question is whether citizens have a desire or obligation to provide corporate welfare. No one thinks that voters would approve an ordinance to directly give these corporations a big wad of tax money, but maybe they won’t be aware if this subsidy is hidden in their water rates.

Pinnacle Foods, the city’s largest water and sewer user, provides a good example. Pinnacle currently pays a subsidized rate of $112, 214 a month. If they paid the same flat rate as everyone else under the proposed increase, their bill would be $162,695. Under the subsidy plan backed by the bureaucrats and the business interests, Pinnacle would pay only $133,506. That would be a monthly corporate subsidy of over $29,000 a month from residential customers.

The local plant is owned by Pinnacle Foods Finance LLC, a Delaware corporation with corporate offices in New Jersey, that has consolidated assets of $2.6 billion. Last year, the chairman of the board and former CEO had a total compensation package of $4.4 million a year. Their local water and sewer bill of $112,214 a month is a lot of money. Behold how the people cast money into the treasury, and many that were rich cast in much for water and sewer rates.

The question is whether residential customers, including our elderly citizens, should continue subsidizing the profits of the large industrial users. "And there came a certain poor widow, and she threw in two mites. Verily I say unto you, that this poor widow hath cast more in, than all they which have cast into the treasury, for all they did cast in of their abundance; but she of her want did cast in all that she had, even all her living."

How about lifeline rates? How about a fair flat rate where everyone pays the same? How about increasing block rates that encourage conservation and sustainability? Worth some consideration, I would think.

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