Water should be affordable for all people, but Chicago also needs money to sustain its water system. Both those obvious truths must be part of city policy on water rates.
Last month, the City Council’s Committee on Environmental Protection and Energy discussed a “Water for All” ordinance, sponsored by Ald. Daniel La Spata (1st), that would give more people discounts on their water bills and give others free water altogether. If aldermen aren’t careful, they could drive the Water Department into the red.
The ordinance, which has 14 co-sponsors, also would prohibit the Water Department from being sold off to private investors.
But here’s the catch: A future mayor and Council could overturn that vote and sell off the Water Department anyway if it becomes an underfunded financial albatross. The city should not go down that road.
The best way to keep the Water Department from being privatized is to ensure the department is sufficiently funded and in good enough repair that a future mayor and City Council aren’t tempted to sell it off. That means making sure the water department is collecting enough money to operate the system, keep maintenance up to date and pay for necessary capital projects. The system must be funded and cared for or it will fall apart over time.
Cautionary examples downstate
Looking around Illinois, towns and cities that have sold their water systems to private interests have not been places with smoothly operating systems that were sufficiently funded. They have been communities where officials faced costly but necessary upgrades or expensive, long-neglected maintenance. Rather than jack up water rates on their residents, the local officials chose to sell off their water systems to private companies.
For some residents, that has meant water bills so high that they hesitate to turn on their taps or flush their toilets. Last year, the American Prospect reported that private water companies in Illinois charge 95% more statewide than municipal systems. Food & Water Watch reports that, after privatization, water rates increase at about three times the rate of inflation.
Once a water system is in private hands, government can’t lower the rates, and there is little accountability. It’s akin to when Chicago sold off its parking meter business and rates jumped up. But that was for 75 years. When water systems are sold, it’s pretty much for good.
Water costs became a bigger issue after Mayor Rahm Emanuel’s administration — to pay for system improvements — raised rates substantially on Chicagoans and suburbanites who get water from Chicago. Before the increase, Chicago had one of the lowest rates among major cities that charge for water. Even after the increase, Chicago’s cost per gallon compares favorably with many cities.
Chicago already has taken important steps to ensure that water is available to people of limited means. Water shut-offs for nonpayment of bills were ended when Mayor Lori Lightfoot took office. Last year, the city rolled out the Utility Billing Relief Program, which gives discounts to homeowners earning less than 200% of the federal poverty level. The pilot program has had more than 14,000 applicants and is set to expire at the end of the year, but the Lightfoot administration will ask the City Council to extend it.
Chicago also has a team that works to restart service to homeowners whose water was shut off before shut-offs were suspended. City Hall is exploring ways to use landlord-tenant laws to help renters who are charged for water by their landlords. Water Department bills are sent to buildings, not to renters.
The Water for All Ordinance would make subsidies available to people earning up to 250% of the federal poverty level, increase subsidies to 75% for some and make water free for residents earning less than half the poverty rate. It also would make the suspension of water shut-offs permanent. But that’s risky. Some nations that have done away with shut-offs have found that even people who can afford to pay for water just stop paying.
New financial help for water systems is coming from the state and perhaps the federal government, and the city says the Utility Billing Relief Program provides a base to build on when more resources become available.
Keep the water flowing
Water is a human right. But a city can’t shortchange its waterworks if it wants to keep clean water flowing smoothly on demand to every city building, including residences that are not metered. With vastly underfunded pensions, the city is not going to have a kitty it can use to easily make up shortfalls.
Finding more ways to help people afford water bills is laudable. But as a nation, we have a bad habit of not paying enough to keep up basic infrastructure. We must ensure that everyone has access to water, but that doesn’t mean the city can ignore how to pay the costs of providing that water.
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