Should our water infrastructure be public or private?

By Deborah Goonan, Independent American Communities

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Now that the crisis of lead-tainted water in Flint, Michigan is getting national attention, it’s time for American taxpayers to do some soul searching. News flash: water supply, sanitary and storm sewer systems are aging and deteriorating all over the nation. The truth is, contaminants are entering water supplies in all 50 states. Most of the time, it’s not publicly reported, or reports are confined to the local news sources.

The trend in some cities is to seek out private funding for rehabilitation of deteriorating water infrastructure. But is that a good idea? Here’s one take on the issue, in this analysis by Pew Charitable Trust Stateline blogger Mindy Fetterman:

 

As Water Infrastructure Crumbles, Many Cities Seek Private Help

http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2016/03/30/as-water-infrastructure-crumbles-many-cities-seek-private-help

Excerpts:

According to a 2015 survey by the U.S. Conference of Mayors, mayors of cities larger than 30,000 said their No. 1 concern was underinvestment in infrastructure. Their top need was mass transit (22 percent), followed by roads (20 percent) and water, including wastewater and storm water (18 percent).

“It takes a big thing like Flint to get people to worry about water,” said Todd Herberghs, executive director of the National Council of Public Private Partnerships [P3s] in Washington. “Roads they see; roads they use. But water? People really take it for granted. People see it as cheap and just, well, just there.”

Water partnerships can be controversial.

Residents often are concerned about losing control over water supplies, and fear that a private company will impose rate increases without voter input. Food & Water Watch, a nonprofit in Washington, opposes P3s because, it said, they don’t result in cost efficiencies and can be more expensive for consumers than public systems. For their part, unions are concerned about protecting city workers’ jobs.

Richard Anderson, senior adviser to the U.S. Conference of Mayors’ water council, said cities need to consider partnerships because the costs for infrastructure improvements are so high that some cities would go bankrupt trying to pay them.

“We allow water to be operated as a monopoly by local governments,” Anderson said. “People go to rate meetings and the nun gets up and says: ‘Rain is free. Why are we paying so much?’ Well, go out and catch it. You’re not in Ethiopia! You’re not going to take a bucket down to the river and get dirty water. It’s very hard for the public to understand why you have to pay so much for clean water.”

 

Exactly. Everyone wants clean water and functional sanitation and storm sewer systems. But nobody likes paying for it. It’s not sexy. There’s no bling or fanfare, as there would be with building a sports stadium or sprucing up the Main Street shopping district or the planting trees and flowering shrubs in the green strip median of commuter highways.

But if tax dollars are limited, where shall we set our priorities?

This is the very same thought process that has led to the proliferation of Association Governed Residential Communities and Developer-centric Multi-function Special Districts. Local government leaders, aware that taxpayers will balk at paying more for new infrastructure, have decided to allow private investment to become the norm for creating new housing and new neighborhoods.

But in the end, taxpayers are still paying for new infrastructure — and in many cases, overpaying for infrastructure of questionable quality — through HOA assessments and Special Tax Districts. When you add in the cost of long-term maintenance, you see that, in the end, the Association living scheme is not such a bargain.

 

The problem with privately owned or operated, for-profit water systems
Privately owned and operated water utilities are not necessarily better maintained than those that are publicly owned and operated.

For example, one HOA master planned community had a privately-owned and operated water and sewer service for nearly 3 decades. Residents became alarmed when they started receiving water quality reports that indicated excessive levels of known carcinogens (know as disinfectant by-products) in drinking water.

What most did not know was that waste water treated by the sanitary sewer system also did not meet federal environmental standards, and was being hauled away to another plant for further treatment. By the way, sewer treatment companies do not have to disclose this kind of information to rate payers.

The poor condition of the water and sewer treatment plant has been well-documented in the local press and by way of a comprehensive engineer report commissioned by the County that later acquired the system.

Shortly after the County acquired the water-sewer plant, they had to invest millions of dollars to rebuild infrastructure. The process is ongoing and will take several more years to implement. Needless to say, artificially low water rates have skyrocketed, and are now among the highest rates in the region.

Some homeowners are very upset about the high water bills. Others are willing to pay more for clean water, but they are frustrated by the slow progress of rehabilitating the system, as problems persist even after rates have more than doubled. As repairs are being made, more unanticipated problems are cropping up. That’s what happens when you buy a “fixer-upper.”

Many homeowners have opted to purchase in-home water filtration systems, obviously another added cost to consumers.

Why should anyone believe that P3s and HOAs save taxpayers money and make housing more affordable?

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