User:RobMarr/US municipal water reform

The State of North America's Public Water

The problem with North America's public water utilities

Throughout most of the North American continent, beyond the major cities and larger conurbations, public water is managed and provided by local municipalities. This structure has been created and perpetuated by the politics governing the security and control of public water supplies. It was controlled by the social and thus political demands within local communities, that were not equipped to communicate their vital needs, in times of drought and food shortages resulting from bad weather and harvest failures. The control of water supplies had to be restricted to each local community.

The structure of most of North America's public water

The present structures of municipal water supply throughout most of North America are based on and owned by municipal governments. Until relatively recent times, there was little notion of a National Water Strategy. That has resulted in less than prudent province/state-wide strategic planning for capital investment. Nor has there been credible focus on the ever-increasing demands for new capital to extend or replace water treatment and water delivery infrastructures. The structural problems with municipal water supply remain. This can be demonstrated also by reviewing the increases in operating costs within the Province of Alberta, as one prime example. That Province has 185 public (municipal) water utilities. Ontario has 1,331 municipalities and OMWA[1] being a representative association of 200 municipal water suppliers in Ontario alone. The result is excessive labour and physical inventory costs, throughout all Canada's provinces which increasingly demonstrate the need for operational and cost management reforms. Unnecessarily high prices for water charged by municipalities, adversely affect consumers throughout North America. The present structure and the out-dated management practices applied throughout the continent's multi-municipality structure of public water supply, are not a credible basis for the optimum productivity of assets, nor for value to ratepayers or investors. These issues need to be reformed, strategically.

What are the public water total revenues per any Canadian province or US state?

The formidable disadvantages of the present structure, include a widespread lack of public knowledge about the total public water revenues per province or per state. This is demonstrated clearly by the persistent difficulties experienced by municipalities, in securing prudent capital financing for municipal water utilities. There are no defined and auditable revenue streams as an asset per state or province. Such is the disaggregated nature of most North American public water utilities' revenue assets. This basic fact also renders public water supplies as being far more costly to every consumer, than is necessary. By aggregating all the water supply revenues throughout each province/state, the costs of need capital, would be reduced. That would benefit every public water customer, because the costs of capital are recouped in the water rate(s) charged. The strategy's implementation will reduce those costs considerably.

This basic fact applies also to reducing of the widespread multiplications of physical inventories held by all municipalities, such as high-cost pipes, pumps, motors and their essential spares. Therefore, reforming public water's inventory management processes through a centralised inventory management services agency, owned by all the municipalities, will reduce manpower costs that are charged to all customers - residential, commercial and industrial. Such reform would enable reductions in the total costs of municipal water inventories, in each province and state.

The need for new management processes

The strategy proposed for public (municipal) water utilities, to secure improved commercial terms for large tranches of loan capital for infrastructure renewal and extensions, can be achieved without any change in the ownership of the municipalities' water assets. Their ownership and governance remains with the municipalities. Thus, no privatisation is involved. Nor is there any need to resort to increased public tax revenues for capital finance. The new strategy proposal is to create a company owned and controlled by all a province's municipalities. That company would centralise and administer all the billings and payments processes, as well the inventory management systems, throughout each of Canada's provinces and the majority of US states.

The economic benefits of a new "Strategy for Capital"

Such management and business systems changes in public water utilities, will eliminate these multiplications of manpower and inventory costs. These changes are directly in the economic interest of all consumers: Provincial and municipal governments, domestic, commercial and industrial consumers and schools and hospitals etc. These proposed changes will considerably improve the availability and terms of loan capital needed for public water infrastructures' upgrades, extensions and replacements; for the economic benefit of all water customers throughout Canada's provinces and many of the US states.

[1] Ontario Municipal Water Association

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