By Robert Carpenter, Editor-in-Chief
They still haven’t learned.
To paraphrase an old saying, you can’t keep putting off until tomorrow what is needed today. When it comes to user fees for sewer and water systems, the inadequacy of rate structure price maintenance is rife with political interference.
A recent news item explained how a long-time mayor of a small Northeastern town arbitrarily decided to delay a water and sewer rate hike, despite the advice from his public works director.
Initially, I could see where the city council would be reluctant to raise rates, since there had already been two significant rate hikes over the previous 18 months equaling roughly 15 to 19 percent. But based upon the volume of work that the city was being forced to tackle, currently and in the future, the public works director had announced he would propose another 5.5 percent increase to both water sewer rates in July. That would represent a raise of 24 percent in less than two years for sewer, and 20 percent for water.
The mayor quickly stepped forward, apparently after mounting complaints, and announced there would not be additional raises in July. He said the city would continue with its infrastructure program that was “compatible” with current revenues. Further, the mayor stressed to the press that since he’s been mayor, he had not increased rates for seven years and that “businesses appreciate the lower water and sewer rates.” I’ve no doubt the citizens of this town liked lower rates – don’t we all.
But the reality is that with inadequate or absent rate hikes, the city is woefully behind in its infrastructure upkeep and needs. The public works director was absolutely correct in proposing another raise. Odds are, to accomplish what is needed (and to keep state and environmental authorities at bay), a 40-to-50-percent raise may ultimately be necessary. Not keeping up with costs and allowing the unseen infrastructure to erode and dissolve into disaster – all in the name of obtaining public favor for holding the line on spending – is a common, near-sighted and selfish game too many public officials play.
Can you imagine if this city – and thousands of others scattered across the U.S. – had simply implemented annual, slight user fee increases (1 or 2 percent, just enough to keep up with inflation), what a difference it would have made in the maintenance of sewer/water systems? That small percent would hardly have been noticed, yet would have been extremely helpful for the infrastructure budgets. Instead, the city will continue to face major jumps in the sewer/water user fees, but still lack the spine to do anything about it.
As part of its exclusive sewer and water survey published in February, Underground Construction has been tracking the time between user fee increases. Our most recent survey revealed that time has decreased to 3.1 years. It has fallen considerably over the past decade, as pressure has been amped up by federal and state authorities to bring systems into compliance with health, environmental rules and regulations. But a small raise every three years is still not adequate to keep up with costs. Heck, that probably doesn’t even cover the cost of the health-care premium hikes we’ve all had to suffer through in recent years.
Rate hikes are never pleasant and often do cause extreme suffering for some people. I have nothing but empathy for folks whose slim budgets get hit with major user-fee increases like a ton of bricks. Baltimore has been forced to raise bills at approximately 9 percent a year since 2009. The city is under a negotiated consent decree with the Environmental Protection Agency (like so many are these days) to address out-of-compliance, and even dangerous, sewer and water infrastructure problems. Baltimore agreed to invest in a 13-year program and spend $1.6 – $2 billion to fix its dilapidated systems.
A 9 percent annual raise in user fees does cause hardship. But whose fault is that? It represents a failure of leadership. A small, incremental increase would have permitted lower- income people to better adjust.
The frequency and amount of user fee increases has grown tremendously across the country over the past 10 years, primarily out of necessity. We need more city leaders to embrace their fiduciary responsibilities and address infrastructure challenges with a plan for the future, and reject the “hold-the-line-on-rate-hikes” club.