SADOW: Rent Seekers Run Faulty Sob Stories by BC Council

Sob stories echoed throughout the Bossier City Council chambers at its last meeting, as rent-seekers bookended the gathering intent on maintaining at least some their grifts on the citizenry or apologizing without taking responsibility for corporate mistakes.

First up during the invited public comment phase of the meeting were several representatives of apartment complex owners in Bossier City, encompassing a few thousand units. They were outraged because the close-to-free ride the city had been giving them on its sanitation fee ended early this year.

Until recently, the city charged $12 a month per multifamily dwelling water meter – whether a small strip or an entire complex of apartments, often water service isn’t apportioned by unit but the cost of which is included in rent, as it comes to all through one single intake to a set of units. But at the start of the year, it changed that to $12 per unit (the typical residence now pays $36) as part of a financial rejiggering designed to erase growing deficit spending bringing to the brink of red ink this year the city enterprise fund that collects and pays out for solid waste pickup, street cleaning, median mowing, beautification, and animal control.

Fantastically, one by one the representatives who for the most part likely each haul in half a million or more dollars a month in rents rose to complain how the new rates threatened to put them and/or their tenants into the poorhouse. Throughout they advanced several arguments that, upon cursory review, were little more than transparently self-serving.

Almost all complained that they didn’t even use garbage pickup services, with their complexes contracting that out. But that ignores the other portions of the fee, where under the previous rate schedule their discrete residences paid just a fraction of what single-family dwellings paid for using the same streets that need cleaning, driving by the same medians that need mowing, and enjoying the same beautification. One speaker did acknowledge the other parts of the fee, but then incredibly implied that apartment dwellers in fact didn’t benefit from these common goods. And then there’s animal control, where the need at apartment complexes may be greater than anywhere else in the city.

Another common complaint stated if the fee were passed on in rent that this would send many of their tenants over the edge financially, and therefore these landlords would have to pay and instead threaten their own livelihoods. Yet it would be interesting to see what kind of rent increases the owners had foisted upon their residents over the past few years, which they appear to see as legitimate if caused by rising private sector prices as opposed to the illegitimacy of the city’s charging fairer fees more reflective of their actual populations. It also would be fascinating to know that in recent history whenever some other input cost that went into determining rent – labor, materials, financing, etc. – whether they all ganged up on the vendor and said that price hike was ill-advised, would run their tenants out on the street and/or bankrupt them, etc.

Of course, if the $12 was passed along, would this seriously drive a tenant to homelessness? Perhaps in a very few marginal cases, but the vast and overwhelming majority would either tighten their belts and/or find cheaper accommodations. Keep in mind that a good chunk of this group has a comfortable amount of discretionary income that if having to absorb such an increase would mean a sacrificing a couple higher-end coffee brews a month.

One introduced a related argument, that he couldn’t hike rates on participants in the government-subsidized Section 8 program, at least in the short run, because of contractual limitations. True, but if he didn’t want to eat it then he could do what the government does in administering the program (if not in running the entire government) in the first place: charge other people more and redistribute the amount to cover others.

Yet the most amazing thing about this was the general cluelessness of the bunch, despite their being successful wheeler-dealers who have to deal with government on a regular basis. They complained they had been blindsided by this, even though the city announced and held public budget hearings starting last October discussing this in detail. You would think with tens of millions of dollars of real estate these people would pay more attention to their city government does. What were they waiting for, personalized letters nine months ago from the executive branch saying it planned on asking the Council for rates hikes and what do you think?

Just as surprising is how long it took them to respond, since the rate increases kicked in over three months ago. Apparently, some time was spent in trying to meet with Republican Mayor Tommy Chandler and Chief Administrative Officer Amanda Nottingham that, seemingly through Chandler’s inattention, were a dead end.

But didn’t these guys realize that it was the Council that made these decisions? Especially as two councilors are related to these people by marriage? This is just another manifestation of why Bossier City is America’s biggest small town, where historically it’s who you know that drives policy that allows insiders to have a far outsized role in how the city regulates activities, collects, and spends money, and on what. They probably figured the city wouldn’t do anything to impact negatively their bottom lines without them getting a chance to change that before implementation because they inevitably would find out from the glitterati that shapes city politics. I guess not.

They asked for a moratorium on the charges, which councilors politely declined to act upon. Instead, a subset of councilors (drat that “walking quorum” prohibition!) will meet with them and discuss whether changes should be made. Despite the poverty of their argumentation, there may be reason to adjust the charge downwards, as the city should use this as an opportunity to determine just how much the non-garbage pickup portion really does cost and see if the $12 charged (or $36 elsewhere for metered single-family residences) really is necessary at that level.

However, that aggrieved group had it easy compared to the reception that Southwest Electric Power Company representative Michael Corbin encountered with the Council with his sob story on a different issue. Even as the Council has no formal power over SWEPCO, at the end of the meeting before report presentations he went onto the carpet to try to explain away the firm’s blackout (the euphemism he used was “load shed”) without warning for a few hours twice last month significant portions of Bossier City, despite no local bad weather.

The most aggressive councilor questioner was Republican Chris Smith, who had studied the issue and took time to view the recent Public Service Commission meeting where the matter was brought up. Corbin, a former Shreveport city councilor, when Smith launched his line of queries appeared to realize the public relations nightmare he had on his hands and resurrected his politician skills to convey the message he wanted regardless of the questioning while trying to squelch whatever made his position look bad.

Which was, SWEPCO did nothing wrong but was a victim of regulations and bad luck, against the proposition slowly built by Smith that SWEPCO had made bad decisions. The line Corbin tried to run was that the unforced outages came because some months ago it made plans for maintenance, using data from its regional transmission organization, which got it wrong but made SWEPCO responsible.

Smith didn’t buy it, drawing upon the PSC meeting that he saw accurately as displaying blame-shifting with SWEPCO in the middle of it. But he couldn’t quite corner Corbin, neglecting to invoke the mic-dropping fact that would have checkmated SWEPCO decision-making as the culprit: its headlong rush into renewable energy at the expense of more reliable fossil fuels for no good reason.

In the past two decades, SWEPCO’s parent American Electric Power has increased its proportion of non-dispatchable power (basically, solar and wind) from 4 to 21 percent of its portfolio. As the share of renewable sources increases, the less margin for error exists when forecasts don’t work out because these cannot reliably take up the slack when other sources are down. Worse, renewable sources increase rates as the necessary reliance on dispatchable sources to compensate forces some degree of redundancy. A study will be conducted due this summer about the incidences, and don’t be surprised if it reveals the unpredictability of renewable power generation played a role and that higher rates to offset will be necessary to fix the problem.

At the conclusion of that segment, Smith declared that from the communications he received from the public was that it had lost confidence in SWEPCO. Corbin assented to that, fortunate that he avoided a complete rout.

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