The grim economy is hitting some consumers in the wallet in yet
another way: their water bills.
Many water utilities are raising rates because water
use is down, in part because manufacturers have closed or are cutting
back, tourism has fallen and the real estate market is in the doldrums.
Water sales for the Kennebunk, Kennebunkport &
Wells Water District in southern Maine fell 11 percent last year, to
1995 levels. The No. 1 reason is the sour economy, said superintendent
Norm Labbe.
One of the utility's largest customers, a catalog
printer, shut its doors last year, putting 374 people out of work.
Tourism also has been down — meaning fewer tourists are taking showers
and flushing toilets in the motels in the region's beachside
communities.
"This is happening most everywhere. It's a regional
thing, it's a national thing," Labbe said. "Many, many (water utilities)
around the country are seeing decreases in revenues. Because if
industry goes down, revenues go down."
A recent study by the Water Research Foundation, a
Denver-based nonprofit, on the recession's impact on water utilities
found that
home
foreclosures and business contractions have reduced water demand
in many areas. Cities with high unemployment also have seen reduced
water consumption as people move away in search of jobs, said
Rob Renner, the
foundation's executive director.
"It depends on where you are in the country.
Regionally, the economy is better in some places than in others," he
said.
Water companies for the most part get their money
from customers. When water consumption goes up, revenues go up — but
when consumption falls, so do revenues.
Water companies often raise rates to pay for
high-priced capital expenditures, such as new water lines or treatment
plant expansions. But they also have to hike rates when water use goes
down to bring in enough money to pay their basic operating costs.
Water rates are based on a wide range of factors,
such as infrastructure and
water
treatment costs as well as revenues from water use. When water
use falls, that would be a reason to seek a rate increase, Renner said.
Water consumption can be influenced by the weather.
In the Northeast, usage declined last summer in part because homeowners
watered their lawns less with the rainy weather. The epic drought that
gripped the Southeast in recent years also resulted in falling
consumption as people were ordered to conserve water.
Nowadays, the bad economy is taking a toll.
Even after cutting costs 10 percent and laying off
nine employees, the water utility in Mount Pleasant, S.C., recently
raised rates 9 percent after its customer base and water sales tumbled.
That amounts to about $50 a year for the average homeowner.
"We attribute our revenue decline to unoccupied homes
due to foreclosures, and commercial businesses just going out of
business," said Clay Duffie, Mount Pleasant Waterworks' general manager.
"When you have fewer customers, you have less revenue."
At the same time, impact fees the utility collects
from developers have dried up, from as much as $6 million a few years
ago to $500,000 this fiscal year, Duffie said.
Mount Pleasant, outside of
Charleston, has been one of the state's
fastest-growing communities in the past 20 years, growing from about
30,000 to 65,000 residents. But development has come nearly to a halt
with the down economy.
In
New
Jersey, the Sayreville water department recently raised rates 13
percent. One big reason was the department's biggest customer, a
steel mill, suspended
operations for several months because of lower demand for its products.
As a result, the water department's revenues fell
$350,000 to $400,000, said Jeff Bertrand, the town's business
administrator.
"That was because of the economy," Bertrand said. "Nobody was buying the
rebar because nobody was doing construction."
And in California, water and sewer rates in tiny Davenport outside of
Santa Cruz are going up
because the economy has forced a shutdown of the local cement plant,
built in 1906. Sewer rates will increase especially fast — up 74 percent
to nearly $2,500 a year — because of the plant shutting down, said
Rachel Lather of the
Santa
Cruz County Sanitation District.
When water rates go up, customers' bills might increase anywhere from a
buck or two to $20 or more a month. That doesn't sound like it'll break
the bank, but collectively the higher rates could amount to tens of
millions of dollars.
And when jobs are scarce, every extra dollar hurts.
In the eastern Maine town of Baileyville along the Canadian border,
residents faced the prospect of both lost jobs and higher water bills
when the local pulp mill announced it was closing.
Baileyville's water utility proposed raising rates 80 percent after the
Domtar Corp.
mill, the utility's largest customer by far, said it would close
because of the poor global economy.
Domtar accounted for 52 percent of the
utility's total sales, and residents would have seen their minimum
quarterly bills go from $55 to nearly $97.
Domtar shut down last May, putting 300 employees out of work, but
unexpectedly reopened two months later after business conditions
improved. Even so, the Baileyville Utilities District had to raise rates
9 percent.
But the prospect of nearly doubled water rates when residents were
losing their jobs was too much for Baileyville, a small town of about
1,500 people where employment largely revolves around the pulp mill.
"You've got to charge more when revenues go down," said
water utility manager
Gardner Ross. "But people don't have incomes coming in, so it's a
double-whammy."
David Mikael Taclino
Inyu Web Development and Design
Creative Writer