How do you not recoup your costs if you charge appropriately for the
cost of service? Part of the cost is a reserve for predictable
maintenance and growth.
Why is a town relying on state funds to provide service to the town?
Why should the town not be providing all strictly local service? If
the town / municipal district / county runs the water system then the
residents of that jurisdiction should bear the costs. If you don't
suck at a higher government teat, then there are no worries about the
flow being cut off.
I hear this "quandary" quite frequently in MD (and from VA as well).
A developer wants to build a new mega housing development somewhere on
the fringe. The existence of these new households will impose
additional up front costs on the jurisdiction, usually in the form of
roads, water, sewer, schools, power, emergency services, etc. There
is much wailing about how can we afford this vs. we need growth. I
have yet to see a government say - "Go right a head mega-builder
corp. Our estimates show a cost to us of $N per unit constructed.
Payment is due before you break ground."
Matthew
On Feb 3, 2009, at 11:27 AM, Snyder, Mark (IT-EI) wrote:
That is a vastly over-simplified account. I never recoup the cost
of my
water or sewer plants in your scenario.
You also ignore the disruption when the state or federal government
suddenly ignores these infrastructures.
Life sounds very simple in your world. Probably too simple.
Thank you,
Mark Snyder
-----Original Message-----
That is actually a simple problem to solve. You charge new customers
the cost of extending service / capacity to them. If a developer
wants
to put in 50 houses a couple miles out from the current termination
point of the service, you charge the developer the full cost of
bringing
in the services. They in turn will fold that into the resale cost of
the houses. If folks won't buy at that price, smart developers won't
build.
The waste is folks using utilities inefficiently because there is no
economic incentive to do otherwise.
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