1. Raleigh's Water System: Conservation dogma confronts fiscal reality

Raleigh's city council members have been on a quest to establish policies that force water users to conserve. During the 2007-08 drought, they used fines to enforce water conservation and actually shut down car washes, pressure-washing businesses, and nurseries in order to reduce water consumption. They were not concerned about the financial hardship they were imposing on hundreds of families.

The reason they opted for coercion was because it is the only tool in their ideological toolbox. After the drought, the council adopted a tiered pricing structure so that residential customers who use more water pay higher rates. Again, conservation is the only goal of this fixed-rate structure. Shifting from coercion to pricing is a step in the right direction, but the fixed tiered-pricing structure cannot respond to fluctuations in supply or the need to pay for the new water treatment plan and the replacement of the aging water infrastructure.

Thus as this article reports, if the tiered pricing structure is successful at getting water users to conserve, revenue will go down, leaving the city unable to pay the bonds for the new water treatment plant and thus having to raise rates. Consumers who do what the city's conservation dogma demands would be punished with higher rates.

The solution to this nonsense is to forget about conservation dogma and establish a flexible rate system based on supply and demand. When water is abundant, prices should be as low as possible and still pay for the operations and maintenance of the system. When the area experiences a drought, prices should rise in order to encourage conservation. When the drought subsides, prices should return to the normal level.

This approach is simple in concept but difficult to implement because many elected officials are ideologically blinded by the conservation dogma or are politically dependent on environmental Luddites who refuse to accept economic policies that work.

Elected officials who want to establish water pricing systems that will withstand a drought should review the JLF report on "Drought-Resistant Water: Variable prices can work better than mandatory restrictions."

2. "The Arts" are a core governmental function in Raleigh

As this article reports, the Raleigh city council has restored the city manager's cuts to the arts budget for the third year in a row. I hate to toot my own horn, but I predicted that result in the June 9 Local Government Update.

The arts community usually gets its way because city council members and arts community members are often part of the same city elite. Thus council members are not only in tune with their special-interest pleadings, they rub elbows with them at the same cocktail parties, arts openings, etc. Even though most city council members are wealthier than the average city taxpayer, they like the fact that taxpayers are subsidizing their preferred form of entertainment.

With "the arts" atop Raleigh's priority list, other needs, such as filling potholes, fighting crime, and cleaning up after the tornado, will receive less attention.

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