Sacramento's Utilities Rates Advisory Commission voted 5-2 to raise water rates in the city by $19 a month over the next three years. The reason for the rate hike? It is to gain a loan from Goldman Sachs to renovate an aging water system. But that loan is going to raise water and sewer bills from $57 monthly to $350 a month in just 15 years.
The city council still must give its approval before the rate cuts are final. But officials seem more and more in support of this measure. City Council members must hear from their constituents that these rate hikes are unsustainable. In a city with near 11 percent unemployment, raising water and sewer bills will only put more financial strain upon the city's residents.
Also residents should be aware that this loan comes with a $10.8 million underwriting fee for Goldman Sachs. The loan itself would total $1.8 billion, and Goldman Sachs would also be making profit off that through interest. Sacramento is a city that is already struggling with painful budget cuts. Sacramento has had to lay off police and firefighters, as well as hundreds of teachers and other city employees. The city has closed libraries, and discontinued other public services. Can the city afford this loan?
And do we really want our trust to lie in Goldman Sachs? Goldman Sachs' actions on the real estate market are at the heart of the economic recession we are in. We have seen time and again Goldman Sachs push individuals and entities into bad loans. Are we so sure this isn't the same trap? Why isn't Sacramento looking for a loan from a local bank? At least a local bank loan would mean that paying off that loan would raise the cash capitol in the city, increasing the cash flow within our local economy.
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