Arlington County recently conducted a study asking residents to select and rate a series of values that should be the foundation for setting the County’s water utility rate structure.
The values: Simplicity, Affordability, Conservation, Economic Development, Cost Equity, and Financial Sustainability.
The first three values are straightforward.
Under “Simplicity,” every resident would be charged the same rate for water and sewer. Under “Affordability,” the first 12,000 gallons of water used each year would be priced at a lower rate while usage above that amount would be priced at a higher rate. Under “Conservation,” the structure would look much like the structure under “Affordability,” but there would be three pricing tiers instead of only two.
A case can be made for any of these three scenarios, although none encourages environmental stewardship by providing incentives for residents to use water to protect their trees, bushes, and gardens.
The last three values are far more problematic. Under “Cost Equity,” customers would be charged based on the cost of how they use water and wastewater services. It costs the utility more to deliver water to or collect wastewater from some neighborhoods than it does from others or, as the study indicated, “it may cost more on a per capita basis to pipe water to one family in a single family home than to one family living in a multifamily building.”
Would developers of large apartment complexes receive a price break? Would residents of wealthy North Arlington pay less because they live closest to the aqueduct that brings water to the County?
Our County Board has adopted a resolution defining equity as “all populations having access to community conditions and opportunities needed to reach their full potential and to experience optimal well-being.” But dividing residents based on housing hardly seems equitable. As one study participant noted, “once we start breaking people into different economic groups and discriminating against some, the end result will be confusion and enmity.”
Another participant observed that this approach could well result in higher rates for low income families further from the main water supply.
Under “Economic Development,” the utility rate structure would be the reverse of the utility rate structure under “Conservation.” Big water users (i.e., businesses) would pay a high price for the first million gallons of water; a lower price for the second million gallons; and an even lower price for all additional gallons.
According to latest available U.S. Census data, the professional, scientific, and technical services sector comprises almost 30% of private workplaces and employs more than one quarter of all who work in the Arlington private sector. This sector is not a large water user.
There are Arlington businesses that use more water — like restaurants which can use as much as two or three million gallons each year. But the big winner would be hotels and lessors of real estate that would take the lion’s share of benefits from the “Economic Development” approach.
Large office buildings like Amazon’s HQ2, and complexes like the 780 rental units Penzance plans to build in two towers in West Rosslyn, will use more than 50 million gallons of water each year. Would these companies pass the County’s largesse on to their customers and tenants? Probably not.
Finally, under “Financial Sustainability,” the County would cover the cost of providing water service in parts of the year in which water use is low by including a charge on every bill that is the same amount regardless of how much the customer used water or wastewater services. One might think that in parts of the year where water use is low, the costs of providing water and sewer service would also be low, but clearly not. After all, someone will have to pay for all these water subsidies.
Equity in water rates would be subverted by giving developers of large apartment complexes, offices, and hotels a break for concentrating large populations in a small area and for using large amounts of water. The cost for all these developer giveaways would be a tax on all residents to cover such cross-subsidies. This would be an inequitable outcome which County government should renounce now.
Peter Rousselot previously served as Chair of the Fiscal Affairs Advisory Commission (FAAC) to the Arlington County Board and as Co-Chair of the Advisory Council on Instruction (ACI) to the Arlington School Board. He is also a former Chair of the Arlington County Democratic Committee (ACDC) and a former member of the Central Committee of the Democratic Party of Virginia (DPVA). He currently serves as a board member of the Together Virginia PAC-a political action committee dedicated to identifying, helping and advising Democratic candidates in rural Virginia.