Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 am to 8:00 am – Leahy and Carmichael were joined in studio by Metro councilman, Steve Glover who broke down the financial situation in Nashville’s water department and how the past three administrations may have brought the city to its fiscal knees.
During the show, Glover also revealed how the department is allocating funds to pay for Nissan Stadium and his recent request for details about how many other situations like this exist in Metro. Glover is still waiting for an answer but admitted a potential need for a water rate increase.
Let’s just be very clear on a couple of things if we may because I don’t like sugar-coating anything. There’s not a choice. We either do what we have to do to fix this right now and the debt level and everything else in the city of Nashville or the state comptroller steps in.
Leahy: Crom, you have a question for Steve about the water rates.
Carmichael: Yeah. Obviously from this report, what Steve was saying is that he knew there were problems. He didn’t know they were as big as they apparently are. Here’s my question. In the case of our government-run school system. You have the board of education and you have a director of schools that reports to the board of education.
The board of education, if it’s not doing its job, what tends to happen is the bureaucracy tends to grow and it tends to just suck money away from the schools themselves. And so I understand where the constituency is from misspending in education. I understand that.
In the water department who benefits from the cover-up that has been going on, it sounds like for a number of years? So who benefits when the management hides this information from its own board and I assume from the public at large and the Mayor and the council? Who benefits?
Glover: Well, first of all, let’s be clear. I don’t think anything was hidden from the previous mayors.
Leahy: Hidden from the Metro council, but not the mayors.
Glover: That’s correct.
Glover: Because I firmly believe the previous mayors knew all about this.
Carmichael: OK. When you say the previous mayors, how many are you going back?
Glover: I’m going back three.
Carmichael: Three. Including Karl Dean?
Carmichael: OK. Alright.
Leahy: Karl Dean, Megan Barry, David Briley. All knew about it and didn’t say anything about it.
Glover: The complexity of the issue under the Dean administration was not as drastic.
Glover: But that’s when we began refinancing all the debt. And we’ve started doing all these silly things you really should not do. And not only the water but for the city as a whole. So who stands to gain? Well, first of all, no one in bulk stands to gain. It is literally just and I believe this, it was the previous mayors in order to get re-elected because they didn’t want to raise water rates.
They didn’t want to raise taxes. They didn’t want to do a lot of things. Look, none of us want to do any of that but we have a responsibility to share with the people where we really are. And what is really happening? And when we make what I call stupid mistakes and we’re spending money in a stupid way this is what happens.
Carmichael: OK. Then how have we been misappropriating or misspending money? Because our water rates here in Nashville are not particularly low.
Glover: Well, they’re not particularly high. What the storm is in some of the other areas, but the actual cost of water is not really that high. And that’s the problem also. It’s convoluted in that it’s all mixed into one bill. And when you see it, all you see is your bill keeps going up every year. But it’s not necessarily the cost for the water and the infrastructure needed to deliver that water.
Carmichael: How has money been misspent? Because I think that’s what you said the issue is. You said money has been misspent over the years.
Carmichael: How should that money of been spent? And how was it spent?
Glover: Well, so don’t think I’m a one-man band on being able to give you the exact answer to every aspect of it. I think that we outsource a bit too much in critical areas. Especially in the stormwater piece where all the contracting is done.
Leahy: What are we outsourcing on that?
Glover: A lot the contract labor.
Glover: Unlike schools. Because look, I’ll raise my hand and say I led the charge to outsource the custodial and grass cutting in the schools because I wanted to push the money back to the classroom. Every penny should go to the classroom in my humble opinion. And I’ll die on that one. So I didn’t have a problem.
Because you know cleaning the schools, getting the grass cut doesn’t really affect the educational process for a child. And so you know when you have a bureaucracy that has several managers and I’ll have to go back and look. But I think when the first stormwater rates really went into effect the middle management increased dramatically.
They were still outsourcing or they began outsourcing even more greatly. Then when it came again, they continued the same pattern as opposed to putting in people who were actually frontline and responsible.
Leahy: Doing the stuff.
Glover: For doing the stuff. Now I’m not a one-man band and I certainly can’t sit here and pretend to tell you I have every answer for it. But I’m knowledgeable enough about it to be able to say that is one area that I think has created a great deal of spending that I would probably come back in and curtail that.
And I would change. So that’s the stormwater piece. The drinkable water. Delivery of that drinkable water, that’s really where we have a massive problem right now today.
Leahy: What’s the solution there?
Glover: Unfortunately, it’s a rate increase. There’s no other solution.
Leahy: There’s no other solution but a rate increase in that case?
Carmichael: So we’re spending the money on the drinking waterside. You’re saying that the money that is being spent, is being spent more or less appropriately. When we expand, when the size of our community grows as dramatically as it’s growing and you have high rise apartments going up and you have neighborhoods that are growing. They’re obviously the people who are now moving into those places are now paying the water bill.
Glover: Well, OK, so here’s the question I asked last Wednesday. When the state controller was there and the water department was there and one of the questions I asked because of the cost factor and what we’ve seen over the last decade. The cost factor is actually risen by about 3.33% annually, cost.
Hard cost to deliver the water. Inflation has only grown at about 1.9% in that same decade. And I asked the question and I haven’t gotten the answer yet. So it’s the right question, I just don’t know the answer yet because they haven’t given it to me. My question was simply this, ‘Why are we moving at 3.33% increase versus 1.90% if, in fact, all we’re dealing with is just a cost in electricity or this or that or that or etc.
I think that’s the key that you just asked though. With all this growth we have not utilized the infrastructure and we haven’t updated the infrastructure. Utilized is a bad choice. We’ve utilized it. We’ve over-utilized the infrastructure and we’ve not accommodated the amount of growth that has occurred and we’re relying on stuff that’s almost 100 years old and in some areas a little over 100 years old.
Carmichael: A big part of the problem is we’ve not updated the equipment?
Carmichael: Probably not updated our information systems?
Glover: Hmm, I think they’re better at that.
Carmichael: Good. Well, that’s a good thing.
Leahy: But it looks like there’s a rate increase coming? For water?
Glover: Let’s just be very clear on a couple of things if we may because I don’t like sugar-coating anything. There’s not a choice. We either do what we have to do to fix this right now and the debt level and everything else in the city of Nashville or the state comptroller steps in.
I’m telling you, that is not a fun thing to do. I’ve never had a state comptroller come in and take over, but I was on the school board when the state came in and took over the schools.
Carmichael: Now let me ask you a question regarding water. Did you say 100% of the revenue for the water, stays in the water department? No?
Glover: No. No, it does not stay in the water department. But they have to operate everything out of the revenue they collect. Nissan Stadium’s still getting 4.5 million. That deal was cut a long time ago. That one will end in a few years.
Carmichael: 4.5 million what?
Glover: In order to pay for the stadium.
Glover: Yeah. 4.5 million dollars.
Leahy: From who? Where’s that money coming from?
Glover: From the water department.
Leahy: The water department is giving Nissan Stadium 4.5 million dollars?
Glover: It’s offsetting some of the costs at Nissan Stadium yes.
Carmichael: So they got a lot of water.
Leahy: You think they’ll run a few more games. (Chuckles)
Carmichael: How many other things, facilities are paid for by taking revenue from them? Because obviously if the 4.5 million of revenue from bills that water people are paying that’s going to fund the stadium. How many other examples of that?
Glover: If you can remember the question I’ll answer it next time because that’s one of the things I’ve asked to get a very detailed report on.
Listen to the full third hour:
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