New approaches needed to solve financial problems
December 5, 2006
Carson City’s leaders may be called into question for entering into an agreement with a private company to fund water and wastewater management projects, but that’s exactly the kind of thinking needed during tough times.
And there are clear signs that Carson City is entering tough times with growing expenses and shrinking sales tax revenue. In a worst-case scenario, it could lead to layoffs of city employees.
Meanwhile, the cost of water and wastewater projects is estimated to be $60 million during the next 10 years, and if some of that burden can be taken by a private firm, taxpayers may be better off.
The private company, Vidler Water Co., will look for ways to improve the city’s water system and possibly generate funds from sources such as the sale of treated wastewater. The trade-off is that the company would take half of those profits.
The talk of privatization of city services shouldn’t end with water projects. Some of the most intriguing ideas from the November election were put forth by failed supervisor candidate Neil Weaver, who said privatization of much of city government should be looked at. That’s a radical idea that Carson City isn’t ready for. For now, smaller-scale projects make sense.
If done correctly, privatization has the potential to save money and deliver services while being more responsive to residents. The profit of those companies depend on it, whereas government monopolies have often led to poor customer service.
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Caution is needed, of course, before any agreements are signed. If privatization leads to reduced services for residents, or if there are hidden costs that would cut into the savings, it would make more sense to stay with city services.