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Orange County Register - 2/15/01

Older cities throughout America are facing costly problems with crumbling sewer and water systems. In response, the National League of Cities has called for large federal subsidies to help cities fix the problem without driving up the cost of services. We've seen how serious the problem can be locally, where leaking pipes are a suspected cause of beach contamination in Huntington Beach.

"The league and more than two dozen other groups began a lobbying campaign to try to convince Congress to approve a five-year, $57 billion program to help communities replace old pipes and upgrade treatment plants," according to an Associated Press article on Wednesday.

That's real money, even by Washington standards. Even though the underground infrastructure problem is a serious one, we don't believe the federal government ought to get involved. Part of it is a federalism issue. Water and sewers are the quintessential local issue. If the feds are responsible for this matter, there's nothing they won't get involved in.

But there's an important practical issue at stake also. Bailing out the system without fixing the root cause of the problem will lead to more bailouts down the road.

Too often, cities neglect their underground infrastructure. "It's a lot better for elected officials to spend money on police or firemen, on something you can see, than on something underground," Robin Johnson told us; he is the director of privatization for the Reason Public Policy Institute, and an alderman for the town of Monmouth, Ill.

Although the federal government has contributed to the problem by imposing costly sewer and water runoff mandates on communities that often are unable to pay for them, he believes that the feds shouldn't become the source of funding water and sewer upgrades.

His town cut sewer and water costs by 20 percent by privatizing the system. It bailed out looming financial problems, and created the means for Monmouth to pay for long-neglected underground sewer and water repairs. Monmouth made the tough choices. It would be unfair for communities that don't make those choices to be rewarded with large federal grants.

Under the previous publicly run system, politicians often tapped into the capital replacement and asset funds to pay for other city services. In a privately run system, that could not be done. He argues that most local governments play similar shell games. "It's sad. That's why [sewer and water systems are] decaying across the country."

And that's why privatization - rather than a huge federal bailout - is the best way to upgrade creaking infrastructure systems.