Check, Please

March 5, 2002

Some recent news stories have brought the issue of who is going to pay for America's aging infrastructure back in focus. The bottom line is that cities hoping for a Federal bailout are badly mistaken. The burden appears to be on the people and businesses that are located in their neighborhoods.

Some recent news stories have brought the issue of who is going to pay for America's aging infrastructure back in focus. The bottom line is that cities hoping for a Federal bailout are badly mistaken. The burden appears to be on the people and businesses that are located in their neighborhoods.

In Baltimore, Federal regulators have offered Baltimore Mayor Martin O’Malley a settlement that would force the city to make substantial repairs to its aging infrastructure at a cost of $900 million. This came after nearly two years of federal investigation and secret negotiations to clear up many violations of the Clean Water Act.

The city’s sewers have been plagued by overflows that have dumped millions of gallons of raw sewage into tributaries of Chesapeake Bay. The EPA and the Department of Justice, along with state environmental regulators, have threatened a lawsuit under the federal Clean Water Act unless the city fixes the problems quickly.

The EPA and Justice Department typically use the threat of lawsuits and fines to force cities to fix systems that pose environmental and public health hazards. Several other cities, including Pittsburgh, New Orleans, Atlanta and Miami, have faced similar enforcement actions as the EPA attempts to speed up repairs of sewer pipes.

The problem is that many times without a regulatory mandate or suit, there is nothing to force the cities to make the rate increases or capital expenditures necessary (especially in the current economy). In Baltimore, O’Malley insists they have been making repairs, just not as fast as officials want. The result of the settlement will be an expected doubling of sewer rates for residents.

In Detroit, a proposed double-digit increase in water rates is expected to take effect July 1. The average increase is 13.5 percent for Detroit residents and 15.2 percent suburban customers. The Detroit Water and Sewerage Department provides services to 125 communities in southeast Michigan.

While Detroit officials empathize with consumers, they say the rate increases are required to pay for state and federal infrastructure upgrades and security measures mandated since September 11. If the rate increases are not approved, there is a danger that the department could fall under court control. The wastewater department is already under the supervision of U.S. District Judge John Feikens.

In a statement supporting the increases, Feikens wrote, “No longer can the people of southeast Michigan look to the federal or state government for grants to finance the necessary capital improvements to the treatment plants and to the infrastructure. These costs must be borne by the users of the system. The health and welfare of the people in this region require no less.”

Canada is facing the same problems. A provincial panel in British Columbia recently recommended a cost-sharing formula that includes provincial funding and new fees gathered from the public business and interests that operate in a community’s water supply such as fly-fishing outfits and logging companies. Currently, Canadian households pay around $200 a year for their water.

Citizens are going to end up paying more for services. It’s a modest expenditure for clean and safe water.

About The Author: Bill Swichtenberg is Editorial Director. He can be contacted at [email protected].

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