How to ease Board of Water & Light rate increases

August 25, 2024

The community needs to come up with some ideas on how to keep the Lansing Board of Water & Light from increasing rates so often.

Get rid of basic service charges. People are complaining that even when they go to great lengths to minimize electricity and water use, they are hit with basic service charges. On my latest bill (below), basic service charges were $20.50 for electric, $16.86 for water and $2.37 for sewer for a total of $39.73. Then there are the other charges unrelated to usage, the largest of which is $11.15 for the sewer inflow/infiltration. Now we are up to $50 for no usage at all.

All these charges generate needed revenue for the BWL, but isn't there a way to do that without charging low income families who are going to great lengths to keep their bills low? I suggest eliminating basic service charges and making up the revenue loss by increasing rates. That would shift the burden to high-use households and businesses.

Quit subsidizing the City of Lansing. The BWL makes payments called "return on equity" to the City of Lansing. They represent "compensation to the City for a permanent easement granted to the BWL" (according to the BWL). The payment for 2023 was $26,428,992 (see Financial Report, page 9). To me, the arrangement exists because it is easier for the BWL to raise rates than it is for the City to raise taxes. And it makes the mayor and other city leaders happy and reluctant to criticize the BWL. $26,428,992 is almost the same the $26,907,181 that is the City's latest annual payment on its underfunded pension systems. Coincidence? I think not! (The total underfunded amount is $344,562,594.)

Quit paying employees to leave. In this story from 2020, I talked about all the BWL employees who have been paid to leave over the years. The total cost is only a few million, but it is a practice that should end. It is lazy management; if the employee is not doing the job, either work with him or fire him. Payoffs are the easy way out, and not likely to occur unless they are made with other people's money. The Board should ban them.

The Board should also ban the non-disparagement agreements included in some of the termination agreements. They suggest that the employee has information that Management doesn't want the public to know. Here is the one for Scott Garrett, who left in 2020 with a payoff of $86,000. In 2019, he was working in Human Resources with a salary of $76,117:

Non-disparagement agreements are an assault on the right to free speech. Also, they deny us information we would like to have. And they are paid for with our money.

Find commissioners less friendly with BWL management. BWL commissioners are appointed to 4-year terms by the mayor with the advice and consent of the council. Due to that $20+ million "return on equity", the mayor might tend to appoint people who won't look too hard at what goes on at the BWL. We need commissioners willing to get tough with BWL Management. Maybe they should be elected?

Also, the Board needs an internal auditor who they choose and who reports to them, like the city council has. Someone who has full access to information and is able to recognize and report problems to the Board.