Saving for an un-rainy day
More on the politics of water rate increases. (See also "Demanding answers.") I addressed the issue in this paper back in 1988, when Springfield also was suffering through a protracted dry spell.
In that piece, I noted that you can make more water available by providing more water, or you can do it by using less of what you now have. The most efficient way to get people to use less of what the city now has is to charge them more for it.
If only ‘twere so simple. Reduced water use means lower sewer charges, which means the Springfield Metro Sanitary District has less cash to pay off debt and keep up essential maintenance. Doing the same jobs with less water also cuts into the sales of CWLP’s water division. The city as a whole gains of course, but it is one of the vagaries of government that actions which are manifestly in the public interest often — indeed usually — are deleterious to public agencies, and vice versa.
Craig Burns of the city's public utilities office explained the problem, "We could set rates based on the marginal costs [but] you end up collecting more than you need to cover present costs of operation and maintenance. That creates what looks like a surplus, and any time you got surplus money on the books it gets crosshairs drawn on it." The city’s water department practically collapsed at the turn of the 20th century because the city council skimmed the "profits" from the department to fund other city operations, when they should have used them to invest in water system improvements.
In other parts of the world, such as France, municipal drinking water is supplied by privately held, regulated utilities performing under contract, companies which are free (within pre-negotiated limits) to set rates high enough to provide for the long-term financing of expansion or, as Springfield needs, efficiency improvements that might protect against future droughts. Unfortunately, providing for the past, not the future, is what U.S. politics is about.