Tuesday, June 27, 2006

Water Rates to Rise or Not?

Metro Council votes for the final time tonight either to break with the Mayor's raise of developers' water/sewer hook-up fees (thus, assuring that residential water rates will rise) or to back-track to the Mayor's plan to raise developers' water/sewer hook-up fees to the level of suburban fees (thus, leaving residential water rates alone). The only real choice here is whether the Metro Council wants to help developers look good to homebuyers because, either way the cat herd votes, the costs will be passed down to consumers. If they vote to keep hook-up fees low developers will not pass the costs on, but homeowners and tenants will pay Metro Water more money each month. If they vote for the Mayor's raise on developers, then homeowners and tenants will be spared, but homebuyers get stuck with the bill on the front end.

This has never been a cost problem for developers, because they certainly would not eat the extra expense of a hook-up fee raise themselves. So, on that score it does not make too much sense for them to lobby council members as hard as they have in the last few weeks to keep receiving what amounts to public charity in their relatively miniscule Metro hook-up rates. This can only be a PR problem for them, but it is a problem of their own making. It is unrealistic to think that you can go on paying a little over $350 to hook up each house in a major metropolitan area when you are paying anywhere from $2,000 to $6,000 in surrounding communities for the same service. The laws of the dollar dictate that your good fortune must end some time (unless suburban governments start lowering their hook-up fees and raising taxes elsewhere). The developers are not going to be the altruist or the patsy in this situation; they'd rather charge someone else than pay the karma they've enjoyed forward.

I do not pity the poor developers. Their recent lobbying efforts show that they are not only able to take care of themselves, but that they also have a significant council contingent who would seriously consider raising the service rates of their more numerous residential constituents before bringing hook-up rates to a more competitive level. Only the council members are going to come off looking like saps in this equation. If they vote with the Mayor, they vote to raise consumer prices; if they vote against they Mayor, they vote to raise consumer prices and they appear to be in the pocket of pro-business special interests. Until that day when the lion lays down with the lamb and when developers come to accept paying their fair share for increased utility costs, I would call the vote with the Mayor the lesser of two evils done to consumers (however, in the interests of ethics I should disclose that I am a property owner with a selfish interest in not paying higher monthly water bills).

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