Wednesday, July 16, 2008

Psst… Buddy…. Wanna Lease a Sewer System?

Because Mayor Don Plusquellic wants to lease Akron’s out.

The mayor hopes to raise $200 million to fund scholarships for “working class kids”, whatever that means. Last time I checked, there wasn’t exactly a surplus of Idle Rich cluttering up Akron, so the definition of “working class” is likely to be redefined as anyone not actually working.

Lots of loopholes in this scheme:

The scholarship program is undefined – we really don’t know yet who would be eligible, or under what conditions or restrictions. $200 million is a lot of scholarship dollars; Akron U and Kent are probably already drafting tuition and fee increases to snag as much of it as possible. Thus making it more expensive for those “non working class kids”. As more government money becomes available to colleges, their charges increase to take advantage of the additional revenue stream.

We don’t have any knowledge if there is a serious company in the bidding to run the water & sewer system and willing to fork over $200 million over the life of the contract to do so.

Indeed, part of the Mayor’s proposal is to include a cap on sewer rates as part of the ballot initiative. Since that will potentially lessen the revenue stream in the future, it will impact the price the lessee is willing to pay, depending on how close the cap price is to the current price. The closer the cap price is to the costs of operation, the less anyone will pay for the lease.

Further, the admission that it’s feasible for a company to take over the city’s water and sewer system, operate and maintain that system, fork over $200 million in payments to the city, and still earn a profit strongly suggests that the current system is run with a staggering level of incompetence and waste, or that the real terms of the deal have not been disclosed.

Personally, I have no objection to privatizing the water and sewer systems, as long as the tax and ratepayers benefit. However, there’s nothing in this proposal to benefit either group. The only thing on the table here is the Mayor’s desire to create a “legacy” subsidy for the university system.

There’s a lot more benefit to be gained by lowering the administrative burden of city government than by launching an expensive new boondoggle. The Mayor could do a lot more good with this money by lowering taxes or utility fees, paying down debt, fixing up roads, adding a few more cops, firefighters or paramedics, etc., etc., etc.

But that’s boring, daily, meat and potatoes of city government; not the heady stuff of shipping big pots of money to the universities for a big money income redistribution program.

Or, if education is the issue, building up support for the biggest problem areas - the K-12 system. Perhaps some new charter schools to build some real skills.