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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
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.