The Politics of Setting Water Rates

As if figuring out how to fund a decades-old water system isn’t difficult enough, you also need to get your elected officials onside so the whole process doesn’t collapse under the weight of angry residents and rate payers. As a full-time water management consultant who is now sitting on the other side of the table as an elected municipal official, I’ve learned a few things. I’d like to share some of those politically-enlightened insights to help you emerge from a water rate review relatively unscathed.

 

Own up to past mistakes and long-overlooked challenges.

You don’t have to wear them personally, but to turn the corner, the organization needs to be upfront with the public about its challenges. Transparency helps build understanding and trust that will pay dividends in the form of more accepting rate payers who recognize their vested interest in the effective management of their water system. 

Withholding or obfuscating details, even if they reflect poorly on your organization’s past performance, will erode the joint sense of ownership both staff and elected officials feel for the organization’s well-being. To make elected officials aware of your challenges, take the time required to walk them through the complexities and trade-offs of rate setting. 

Be clear about the risks.

Let’s face it, having to raise rates or fiddle with complicated rate structures is an inconvenience for politically motivated elected officials. Take a page from the police services playbook: be crystal clear about the public safety risks of under-funding your water system. It’s not just strategic, it’s your obligation to be upfront with the community about the risks associated with inadequately funding the services your department provides. 

Comparisons matter (even apples to oranges).

Indulge your elected officials in their predictable desire to know how your community’s rates stack up to other nearby communities, even if you have a list of caveats as long as your arm. If the comparative results aren’t flattering, use this rare opportunity with a fully engaged council or board to help them understand what makes your water system unique or particularly challenging, including how you (and they) can help keep future costs under control.

Getting the implementation and communication details right is critical. 

There’s often an element of inevitability with rate reviews and water rate increases, but even the most rigorous review can go sideways during the last phase of the process: implementation and communication. It’s essential to make sure enough consideration is given to the impacts for rate payers, both real and perceived. Elected officials are the direct line to your community. They’re the first to hear about it when your department takes a misstep. To put their full support behind you, they want assurance that not only will the new water rates be justified, but also that the change will be implemented carefully and thoughtfully. 

Close up of microphone on a podium in an auditorium

Present a detailed communications and implementation plan with the proposed rate schedule so they know exactly how the changes will be presented to and experienced by rate payers. Even if that seems operational in nature and inconsistent with your council’s strategic role, a carefully thought out communications and implementation plan will help ensure your rigorous rate review passes muster politically and avoids being counted among the many good policies that fail at the implementation stage. Plus, elected officials might not be academically qualified communications specialists, but by virtue of becoming successfully elected to office they’ve picked up a lot of skills in this area. Acknowledge that fact and welcome their input early in the process.

Stroke their egos.
That’s right.  Everyone in elected office has one. Let the fiscal conservative in the group know you’re striving for their full-cost recovery goals. Let the U40 elected official know that we’re doing the heavy lifting now to ensure equity and sustainability for their kids and grandkids — your community’s future generations (and rate payers). Do this by anticipating their questions. Put yourself in their shoes. Think about the political risks of the decision before them — not simply the critical reasons for the new rates, as indicated by the math — and frame the problem and the solution in a way that addresses those risks. 

But even with the best-laid plan, remember that decisions made by a bunch of politicians are often — well — political. That’s the nature of democracy: messy and inherently unpredictable. It doesn’t mean the new rates or the reasons for them weren’t sound. It doesn’t mean you didn’t engage with or communicate to the community enough, or that you didn’t clearly present your case to the decision makers. It simply means there were other factors — most likely beyond your control — driving the decisions. 

The most effective and longest-serving public servants are those who learn to let politically-driven outcomes roll off their backs. Remember it took decades to accumulate the infrastructure deficits plaguing the majority of water utilities. Sustainable water management is imperative but it, too, is a long-term game.

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Rebecca Mersereau is Director of Consulting at Econics, Councillor for the District of Saanich in British Columbia, and Chair of the Capital Regional District Regional Water Supply Commisson. 

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