It reads to me that the problem was as you identified it: "Connection
and availability fees were too low."
If you charge what it actually costs then polities have a greater
incentive to build only what they need, and users have an incentive to
be much more frugal in their use. If you subsidize costs, you get
predictable waste.
Matthew
On Feb 3, 2009, at 7:50 AM, Snyder, Mark (IT-EI) wrote:
I am on the town council in a historic Virginia town of about 700. We
provide water and sewer services to in-town residents. In the 1970's,
the town built its sewer using state and federal grants to defray
almost
all of the cost. Connection and availability fees were too low. When
we realized we needed to replace it several years ago, all hell broke
out because the state and federal grants had disappeared. We have an
impressive business base in town, but, as the council member leading
the
utility, the debt spread over about 500 customers was daunting, about
$5m (state of the art membrane technology). We were lucky to get the
builder of the inn agree to pay for the new plant in exchange for
allowing them to build a 168 room inn, as their availability fee.
It is
now under construction. Now, we are trying hard to make sure the
availability fees will actually cover the cost of the infrastructure
that new development consumes. But I must wonder how towns that are
not
as lucky as us will make do. Will they build cheap plants that are
bound to fail? Or will the US start supporting its infrastructure
again? We are replacing old water mains and spending more to repair
old
sewer lines. People still complain loudly that we should cut rates,
but
that would be ruinous.
Thank you,
Mark Snyder
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