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Appealing property taxes

Hundreds of South Florida property owners who wanted to appeal the tax bills the local property tax billing software has generated are out of luck because they didn’t pay first, according to the Sun Sentinel.

Rejection letters have been sent to nearly 1,200 property owners in Broward County because they didn’t pay most of their taxes before March 31 – even though they thought their bills were too high. Now they’re stuck paying the full amounts, plus interest.

Under the law, which took effect July 1, owners who want to appeal their tax bills must pay 75 percent of their property taxes and all of their special assessments, or non-ad valorem taxes, before April 1.

In the past, property owners didn’t have to pay until appeals were heard.

Maintaining water supplies

Two pieces of legislation, one state and one federal, could help water utilities meet their future needs.

This is the final day of National Drinking Water Week, and the American Water Works Association, which sponsors the annual observance, is lobbying in favor of the federal Water Infrastructure Finance and Innovation Authority as well as the state Senate’s bill 132 on collection of data by the Indiana Utility Regulatory Commission.

The federal WIFIA would help utilities deal with the estimated trillion-dollar cost for upgrading the water and sewer infrastructure over the next 25 years. It would use U.S. Treasury funds to provide low interest loans, loan guarantees or other help to local communities.

Water utilities have a minuscule default rate of 0.4 percent, and, if the state revolving loan fund uses the money, it would be a way for communities like Valparaiso to finance smaller projects.

Also, the U.S. Commerce Department estimated each dollar spent on water infrastructure generates $2.62 in private investment and every job added to the water workforce adds more than 3.5 jobs to the economy.

Water infrastructure

The ageing water infrastructure and the shortage of water have been common themes over the past week.

A study by the American Water Works Association "Buried No Longer: Confronting America’s Water Infrastructure Challenge" estimates it will cost a trillion dollars to repair, replace and expand the water systems in the U.S. to meet the demand over the next 25 years. The figure grows to $1.7 trillion by 2050.

"We all agree water is an essential element in our daily lives, but, for North Americans, water service is a convenience that we too often take for granted," AWWA Executive Director David LaFrance said. "Those buried pipes deliver the water that is vital to our quality of life and economic vitality."

The AWWA is highlighting the importance of the infrastructure situation as part of its National Drinking Water Week message this week. Much of the infrastructure was constructed in the late 1800s, the 1920s or during the post World War II boom. Most or all are past their life expectancy and need to be replaced within 25 years.

Floating in money

I’ve never known a utility that’s short of money; most, after all, are monopolies.  So it’s no surprise to read that Philippine conglomerate Ayala Corp. (AC.PH) will partner its water utility unit Manila Water Co. (MWC.PH) to invest in infrastructure companies in Vietnam.  Water billing software is a utility’s cash register.

Ayala Corp. has been awarded the right to acquire a 10% stake in Ho Chi Minh City Infrastructure Investment Joint Stock Co. while Manila Water will buy a 49% stake in Kenh Dong Water Supply Joint Stock Co., Ayala said in a statement to the stock exchange, without specifying any financial details.

Ho Chi Minh City Infrastructure Investment holds business interests in water treatment plants and toll roads serving the city and surrounding areas. Kenh Dong has a water treatment plant, with a projected capacity of 200 million liters a day, which is expected to start commercial operations by the second half of the year.

Delinquent bills

It doesn’t matter whether it’s property tax billing software or water billing software, one important piece of functionality is the ability to follow up delinquent payers.  In Naples FL they’re putting the high number of delinquencies to tough economic times. 

The number of past due Naples utility bills have been on the uptick for years, and while some officials are concerned the delinquent accounts are part of a greater problem, the city’s finance director said the increase is a sign of tough economic times.

The city of Naples was owed more than $664,900 as of April 4 in utility bills that were more than 90 days late. The sum is down from a December 2011 high of more than $827,000, but still far exceeds the amount due in 2005. The more than $664,000 includes delinquent payments for sewers, landfills and water. The rate of delinquency increased every year since 2005 before reaching an all-time high in 2011.

The city bills more than $39 million a year in utility charges, and Ann Marie Ricardi, the city’s finance director, said the $664,000 sum is a "cumulative figure of receivables" since about 2005. That averages out to about $95,000 a year that becomes partially uncollectable, Ricardi said, noting this equates to less than a quarter of a percent per year.

Lowering property taxes one by one

The San Diego News reports that San Diego County homeowners may be over-paying property taxes.  That’s because their home is worth less on the market than the value determined by the county assessor.

When California State Proposition 8 was passed in 1978, it stated that if a home’s market value is less than its assessed value, then the assessed value should be reduced.

One way homeowners can protect themselves is to ask for an "assessment review." The application can be filled out online and it asks the assessor to lower a home’s value to market value before property tax bills are mailed. The deadline to request the review is April 30. Homeowners will find out the results in July when the annual notices of values are mailed.

To complete the form, homeowners need to provide comparable sales information as close to Jan. 1, 2012, as possible and give an opinion of what the market value of the home was on Jan. 1, 2012.  Results would then be included in the county’s property tax billing software for calculation purposes.

New California regulation

California State and local officials moved to tighten control of water utilities this week. Both measures could affect Barstow’s water utility, Golden State Water Company.

In Stanton — which has partnered with Barstow and three other cities to share legal costs to fight proposed water rate increases — the city moved to remove Golden State from its city, voting to decline to renew the city’s franchise agreement with the company. That means that the utility will no longer provide service to its residents when the agreement expires in 2014. The council agreed to send a letter to Golden State notifying them of the decision.

In a statement, a Golden State representative said they could not speculate on Stanton’s actions as they had not received formal notice of the decision.

Meanwhile, in Sacramento, a bill by Senate Republican Leader Bob Huff, R-Diamond Bar, that would tighten regulation of water utilities passed unanimously in the Senate Energy, Utilities and Communications committee Tuesday. Huff’s bill was introduced “after many of my constituents expressed their concerns and frustrations with yet another proposed water rate increase by Golden State Water Company,” the senator said in a statement.

The bill would amend sections of the Public Utilities Code to extend certain provisions to water utilities that currently apply only to gas, electric and telephone utilities.

Opinions on property taxes

In Pennsylvania writer Seth Grove has come to recognize why statewide property tax reform is so difficult.

There are counties in Pennsylvania that have not reassessed property values in more than 50 years. There are also regions where the property tax is the only option to fund public education and local government services.

Additionally, our state education funding formula rewards areas with decreasing student enrollment, which means any statewide tax shift could result in a tax increase for these residents. Members from these areas have no motivation to adopt sweeping statewide elimination of property taxes in favor of a shift to another method, and these members make up the majority of the Legislature.

However, many members would be willing to support a plan providing local tax options, which is the intent of my House Bill 2230. Along with allowing all school districts and all municipalities to move away from property taxes by shifting to income-based taxes and the sales tax, this legislation does the one thing each previous local tax reform measure failed to do — it will prohibit local taxing authorities from increasing property tax millage rates.

Smart meters are all the rage

More and more water utilities are installing “smart” meters to support their water billing software.  The main advantage of the smart meter for a water utility is the ability to read a meter without a meter reading having to visit the premises.  A secondary benefit is a more timely detection of leaks. It can also support more frequent billing, helping with cashflow. 

Beginning in July, the Madison Water Utility in Wisconsin will begin installing "smart meters" in all of its 66,000 customers’ homes at a cost of $14 million.  Currently, water customers use 10 billion gallons each year, some 30 million each day. Madison Water Utility officials have set a goal of reducing water usage by 20 percent by 2020, and they believe the new metering technology is key to making it happen.

"It helps us diagnose leaks and system problems. It helps consumers know the impact of if they take shorter showers or if they buy a new appliance," said Tom Heikkinen, general manager for the Madison Water Utility.

Once the system is in place, customers will begin receiving monthly bills. Currently, customers only get an accounting of their usage every six months, making it hard to tell how changes in water use habits result in changes in cost for consumers.

To help make the change, Madison Water Utility staff, working with contractors, will visit every customer by appointment. In basements, they’ll change the meter head in most cases, but about 10 percent of customers will get an entirely new meter. Once the meter’s connected, workers will run a wire up to the floor joists and install a transmitter the size of a pack of cocktail napkins.

The transmitters will then send a signal every minute of the day. Once an hour, one of those signals will be picked up by a receiver mounted around the city, such as receivers on the tops of water tanks and towers. Each burst of information lasts only a millisecond, using about half a watt of energy each time. That’s about a fourth of what it takes to transmit a cellphone signal, Madison Water Utility officials said.

Smart meters for San Francisco

In San Francisco the water utility’s smart meters are causing much less of a controversy than the electricity utility (PG&E)’s move into smart metering for use by their water billing software.  Why is that?

Although the meters work on some of the same basic principles as PG&E’s, there are significant differences.  The meters, made by Elster Amco Water Inc., are analog rather than digital. A small device attached to them, made by Aclara, sends the meters’ information to the utility four times per day.

This setup is similar to PG&E’s natural gas SmartMeters, which are just automated transmitters attached to a home’s existing, analog meter. PG&E’s electricity SmartMeters, in contrast, are entirely digital.  PG&E’s meters communicate through a mesh network, in which meters frequently relay information to each other. The water meters communicate directly to 77 data collection units scattered throughout the city, resulting in fewer transmissions per day.

Since 2010, the San Francisco Public Utilities Commission, which provides water service to city residents, has been quietly upgrading its meters with technology similar to that used by PG&E. The new water meters have a transmitter attached that relays their data automatically, over a wireless network - much like PG&E’s. To date, the city has installed 81,000 of the new meters - replacing almost half of the water meters in San Francisco. About 95 people have objected, said Steve Ritchie, the commission’s assistant general manager for water. Of those, the commission has been able to convince 18 that the meters are safe and accurate.

The rest still have their older meters. The commission may create an opt-out plan for them but hasn’t done so yet. "We’ve basically put them in a parking lot," Ritchie said. "We want to talk to each one individually, understand their issues." The commission started the $60 million upgrade project because its existing meters were getting old, and in many cases slowing down. As a result, customers will see an average 2 percent increase in their water bills with the newer, more accurate meters, Ritchie said.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/28/BUTI1O9T0Q.DTL#ixzz1tOfHpZpd