GAO Examines Water Infrastructure Issues in Cities with Declining Population

The General Accountability Office (GAO) was asked by Congress to review the water and wastewater infrastructure needs in midsize and large cities with declining populations.  Their report examines (1) the economic characteristics of such cities and their water and wastewater infrastructure needs; (2) strategies that selected cities and utilities have used to address their infrastructure needs and the affordability of their water and wastewater rates; and (3) what existing federal programs and policies, if any, could assist such cities in addressing their needs.  These cities face the challenge of a corresponding decline in utility revenues from a loss of ratepayers, which makes it difficult to address their water infrastructure needs.  Even with declining population, these cities have the same needs for replacing aging infrastructure as other cities in the country.
Utilities for the 10 cities GAO reviewed used the strategy of raising rates to increase revenues to address water and wastewater infrastructure needs and used other strategies to address concerns about rate affordability for low-income customers.  Most of the utilities raised rates annually to cover declines in revenues related, in part, to decreasing water use from declining populations, or to pay for rising operating and capital expenses.  To help address rate affordability concerns, all of the utilities reviewed had developed customer assistance programs, a strategy to make rates more affordable.  There are federal programs that can assist the cities with declining populations in addressing their water and wastewater infrastructure needs.  One of the programs cited in the report was the State Revolving Loan Fund; and specifically, use of additional subsidies to help disadvantaged communities.   Review the complete report here.