The mayor of O’Fallon, Illinois says that leasing the city’s water and wastewater systems to a private company would generate $50 million that could pay for citywide improvements.
The issue of water is the hot topic on O’Fallon’s April 7 election ballot.
Three companies are going head to head for the leasing rights and all have agreed to a lump sum of $50 million, but public opinion will still be considered.
St. Louis Post-Dispatch reports:
“The bottom line, Mayor Graham says, is that O’Fallon, population 30,000, is growing fast and needs to improve its infrastructure to accommodate more people and businesses.
He said getting revenue from the lease of water and waste water systems is preferable to raising property taxes for such projects.
“Most cities that do this are in financial trouble. We’re not doing it because of that,” Graham said.
O’Fallon is one of the few cities in the metro area that still own and operate their own water and sewer systems. And its residents currently have some of the lowest bills for it in the region.
Opponents of the plan, including Kie Zelms, say they are worried that turning operation of the system over to private entities will lead to higher bills.”
The main concern of the opposing party is that there are no regulations for utilities leased and that the city would be better off keeping control of the whole system.
However, the mayor is adamant that because O’Fallon is a growing city, it is worth more upfront to water companies and therefore would generate more capital if the systems were leased.
It’s a tough decision and O’Fallon is considering the options thoroughly enough to make it an informed one.
Inframanage.com notes that leasing is one of the many solutions that are available to municipalities for the future management and development of city utilities.
There is never a ‘free lunch’ as someone always has to pay.
The questions to consider when analyzing different methods of managing and developing infrastructure are who pays and when do they pay?