Water privatization may undo NW LA politicians' folly

During Christmas, people think about getting gifts in their stockings. A week afterwards, both Shreveport and Bossier City gave their citizens lumps of coals with water rate hikes that, with enlightened leadership, could have been avoided.

In Shreveport, the increases are just the latest in a series designed to fix the crumbling infrastructure of the water and sewerage system, and they will continue in the coming years. Of course, had the city not blown approaching $200 million combined on a convention center that continues to underperform and a hotel that hasn’t even yet met paying the interest on its debt, much less the principle, these problems already could have been addressed without pumping more money out of water users. (Although almost none of the decision-makers that perpetrated these white elephants onto Shreveporters continue in office to deal with them today.)

In Bossier City, the issue is different but the folly remains identical. About $77 million is going to expand the system – almost the exact cost of a money-losing arena courtesy of a previous set of council members and, with a few changes its composition and the promotion to his present office of Mayor Lo Walker, that of a parking garage for the Louisiana Boardwalk that the developer would have paid for. “It's always tough to raise rates. But we're poised for huge economic growth. It's imperative we build the infrastructure we need,” said member David Montgomery which begs the question why he wasn’t thinking like this years ago when he and his free-spending compatriots on the council voted to give away $21 million for the garage.

As typical of many local politicians around here, ego mattered more than wise use of the people’s monies and thus they would rather see their names on plaques and stick it to the ratepayers than be responsible stewards of somebody else’s funds. About the only justification for tying in rate increases to funding these water-related activities would be that as a type of municipal corporation operating a fee-for-service business to citizen consumers, revenues and expenditures should be reasonably related to the basic activity.

That being the case, then why not take the next logic and desirable step – getting these cities out of the water business entirely? There’s no reason why municipalities have to own and to administer water provision. In fact, thousands of cities across the country have private concerns provide water – just as in the case of electricity, gas, telephone, and cable service in Shreveport and Bossier City.

Generally, in the U.S. privatization in this area has taken the form of a municipality contracting out operation of existing infrastructure. While it seldom goes as far as selling the entire system, usually part of the agreement is that the private operator will provide for upgrading and/or expanding the city-owned system.

Studies of water and sewerage privatization in the U.S. shows typically it provides greater efficiency, improved ability to meet environmental standards, and in over nine out of ten cases once privatized cities are satisfied enough that they continue doing it past the initial contract. If it’s good enough for Houston and Chicago, both of whom have privatized their services in the past decade, surely it’s good enough for Shreveport and Bossier City.

Unfortunately, regardless of party label trying to get most politicians in Shreveport and Bossier City to reduce the size of government and spend less on it is like trying to pry a rock out of a crack addict’s possession. For example, few should forget how Bossier City hung onto Bossier Medical Center like it was a crown jewel, even as other easily-accessible for- and non-profit hospitals began economically to drive it into the ground. Such was elected officials’ pride in ruling that fiefdom that when offered to sell it at a premium, they refused. The competitor then built its own a couple of miles away and the chastened city had to sell out a few years later at a much reduced price, costing taxpayers millions of dollars.

What both cities should do immediately is start a process designed to contract out water services since both contemplate making big additions to their systems – the aforementioned expansion for Bossier City, and consideration of adding the Red River as a water source for Shreveport. No doubt a more cost-effective method will be found through privatization the commencement of which should have savings immediately returned to ratepayers or used to accelerate the expansions. The citizenries will benefit from this truly innovative thinking.