The Washington Post | By: Elizabeth Douglass | July 8 at 7:00 AM:
LAKE STATION, Ind. — This hard-luck town just south of Chicago is weighing a decision confronting many small and midsize cities with shrinking populations and chronic budget deficits: whether to sell the public water system to a for-profit corporation.
Lake Station desperately needs the cash. Once solidly middle-class, the town of 12,000 has suffered from cutbacks at nearby steel mills, statewide caps on property taxes, and debt incurred to build a pricey new City Hall.
Selling the water system would erase $11 million in utility debt and leave the city with a $9 million windfall. But the deal does not fund any of the water system’s $4 million in overdue repairs, costs that will be passed along through higher rates. Customers usually pay more for water after private companies take over.
“You’re in bad shape financially to where you’re talking about laying off police, so you’re going to have to do something,” said Lake Station Mayor Christopher Anderson (D). “The biggest issue with privatizing is we’re losing control of the operations.”
Neglected water infrastructure is a national plague. By one estimate, U.S. water systems need to invest $1 trillion over the next 20 years. Meanwhile, federal funding for water infrastructure has fallen 74 percent in real terms since 1977, and low-interest government loans have not filled the gap.
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