As you ponder how to balance your community’s finances and make tough choices about what you can afford, have you stopped and asked if you are exacerbating an already tough situation? If your rates and charges for your utility systems are not set properly you just may be doing just that.
When elected officials sit down to plan out their year, it is highly unlikely that their most anticipated activity is adjusting water and sewer charges. Adjusting utility rates is certainly not the most desirable endeavor an elected body can engage in, but it is one of the most important. If your community doesn’t perform an annual review and adjustment of your water and sewer rates that fully captures the costs of the system, you are negatively impacting the rest of the community’s operations. At this point you are probably asking: why? The answer is really quite simple. If the rates and charges your community charges don’t fully cover the costs of the service, where do you suppose the revenue comes from to make up the difference?
There is also a real equity problem. A taxpayer’s SEV has nothing to do with the amount of water utilized. Residents and businesses alike that are high users of water benefit immensely from inadequately set water and sewer rates. Conversely, low users carry an unfair burden. Would you offer to pay your neighbors electric bill when he has 4 kids, 8 TV’s, and lights on 24/7 when you live alone and manage your electric usage? Of course not, but that is effectively what happens when rates are improperly set.
No one wants to raise utility rates, but if they don’t capture all your costs you are adding to the already difficult circumstance of managing your community’s finances and delivering services. Make sure everyone pays their fair share. No more,but certainly no less.