2.2.12

Sewer solution: sell M.U.D.
By Paul Hammel, Omaha World-Herald

LINCOLN - Omaha Sen. Scott Lautenbaugh says another way to finance the city's billion-dollar sewer problem ought to be considered: selling the now-public Metropolitan Utilities District.
       
Omaha is facing a $1.7 billion bill - the largest public works project in city history - to comply with a federal Clean Water Act mandate to reduce raw sewer discharges into the Missouri River.
       
Omaha-area ratepayers will pay the cost through steeper sewer fees, and efforts to get the State Legislature or Congress to help pay the bill have not yet borne fruit.
       
Lautenbaugh introduced a resolution Wednesday to study the sale of M.U.D. He said it appears that no one wants to raise taxes to help Omaha and that privatizing the gas and water utility would raise funds to offset the projected, steep increases in sewer fees.
       
"This is a big tab we have to pay," Lautenbaugh said. "I don't know why we don't look at it."
       
M.U.D. officials said that while lawmakers are free to study any idea, public ownership has kept water and gas rates in Omaha among the lowest in the nation, which makes the city attractive to new businesses.
       
Privatizing the company would increase rates, said M.U.D. board chairman Mike McGowan, because private utilities not only have to cover costs of services, but return dividends to investors and pay taxes.
       
"By privatizing, I'd say you're robbing Peter to pay Paul," said McGowan, who used to work for a private, natural-gas company.
       
Ratepayers, he added, would also lose control of M.U.D. decisions because they would no longer elect the governing board.
       
Lautenbaugh said he's just beginning to look at the idea but said there would be "no free lunch" in paying for the sewer project.
       
It's not the first time someone has floated such an idea.
       
But there is at least one alternative out there when it comes to the sewer issue: Omaha Sen. Heath Mello has a bill pending second-round debate that would return about $8 million annually to Omaha from sales taxes paid on the increased sewer fees.
       
Mello said his tax "turnback" proposal, Legislative Bill 682, is a "common-sense approach" that doesn't require a study or the sale of M.U.D.

arrowMedia Relations: 402.504.7169
After hours and on weekends: 402.504.7946

arrowClick here to add your e-mail address to the newsrelease distribution list.

arrowNews archive