IAMU Informer
Follow IAMU!
  • Informer News Feed
  • IAMU Website

Value of Water-Who Pays?

12/2/2014

0 Comments

 
Picture
by Jill Soenen, IAMU Water Services Coordinator

Earlier this fall, I attended a council meeting for a small community (less than 350 people) to talk about water rates.  This town seemed to be in the same boat as many others across Iowa; rate increases haven’t kept pace with the financial demands of system upgrades and replacements, or in some cases even enough to cover every day operation/maintenance let alone any “emergency” expenses.   

Two citizens other than the council, mayor, and clerk were in attendance and it seemed their concerns were not just a proposed rate increase, but included salaries, taste and odor issues, staffing, etc. While talking through the issues and why revenue at a minimum needs to cover expenses and the importance of capital improvement planning, the one gentleman in attendance posed two fantastic questions.  He asked, “Who pays?” and “Why are we expected to pay for a system someone else was in charge of maintaining and didn’t?”  I’ve talked to people (even my parents when their rates in my hometown were increasing) more times than I can count about the importance of planning for projects and funding upgrades, but had never considered this angle before.  The phrase that commonly describes drinking water infrastructure is “out of sight, out of mind”. Because of this mindset, the infrastructure has been neglected and expected to perform far past its useful lifetime.  Customers now are being asked to pay for infrastructure that should have been replaced 10, 20, maybe even 30 years ago.  

In 2012, the American Water Works Association released the report “Buried No Longer: Confronting America’s Water Infrastructure Challenge”.  This report has several key findings, one being that the cost of replacing current infrastructure having reached the end of its useful life is $1,000,000,000,000 over the next 25 years.  Yes, that’s 12 zeros!

 The following year the American Society of Civil Engineers (ASCE) released the 2013 Report Card for America’s Infrastructure in which they gave a “D” to the country’s drinking water infrastructure.  To those of you in the industry, this is no surprise.  But do your customers understand the urgency of this issue? 

Systems across the country are asking their customers to cover the costs of aging infrastructure. How a system funds those projects (loans, bonds, capital improvement reserves) is a topic for another day, but the fact is water rates are going up and will continue to increase. 

Many systems are budgeting and performing rate reviews this time of year. If during this process you find that a rate increase is needed, be prepared to advocate for the improvements and projects it will fund. Explain to your customers that to maintain or improve their level of service and continue to provide them with safe and reliable drinking water investments into infrastructure are a must.

I encourage you as general managers, superintendents, board/council members, clerks, and operators to be champions for your water system and leave it in the best condition possible for future users…they will pay for the improvements/upgrades for the consumers after them, as your current customers are paying now.

Back to small town Iowa… I don’t know whether the city decided to move forward with a rate increase, but after the discussion that evening I do know that those 2 citizens in attendance had a clear understanding of why their rates needed to go up.  They weren’t necessarily happy about it, but at least they recognized the importance of maintaining infrastructure.
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

      Subscribe To The Informer

      You can subscribe to The Informer by adding the RSS feed to your feed reader. Or, to request to be added to our weekly email blast, provide your information below.  NOTE-you must be an IAMU member (utility, affiliate, or associate) to receive the email blast.
    Submit

    Archives

    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014

    RSS Feed

Picture

Copyright 2018 Iowa Association of Municipal Utilities