Monday, March 17, 2008

Not everything is as it seems

So, I'm gonna save my March Madness column for later this week (GO BAYLOR!!!!), and instead, I'm just gonna point out two articles that perfectly capture how messed up things are:

1) Dallas to turn off red light cameras. Why you ask?

The city said the cameras are failing to generate enough red-light-running fines to justify their costs.

Dallas lawmakers originally estimated a gross yearly revenue of about $15 million for the system. The city is about $4 million below that estimate.

So, for everyone to see, the City of Dallas is using red light cameras as a source of revenue, not for safety reasons. I have no problem with that, I just wish municipalities that install these things come out and say it- when the rationale is "safety" but the reality is to make money, just say it's about making money.

2) City of Charlotte to see increase in water rates. Ok, so what? They are in a drought and prices should go up in order to get people to conserve, right? Well. . . .

Because of restrictions on water use, officials predict a $29 million dollar shortfall over this year and next. They worry they won't meet financial obligations. Charlotte's water rates are low compared with other cities, they say. And for the average water user, the proposed increase translates to what may seem a manageable figure: $6.36 a month.

.......

The department estimates Charlotte-Mecklenburg's lawn-watering ban and conservation efforts will cause a shortfall of about $9.3 million between now and June. If the restrictions continue through early 2009, as expected, utility officials say they'll lose $20 million more.

The ban on lawn watering hit the department especially hard because the utility charges more for irrigation than household water use -- and Charlotteans love to water their lawns.

The residents of Charlotte, being good citizens, conserve their water usage at the urging of the city, then, at the end of the year, the city sees that they undercollected revenue from their water sales, and have to raise prices to make up the shortfall. It's just one of those things that make utility regulation very difficult- in emergency situations, you want people to stop using, but as a result, you end up reducing utility revenue, and then they have to raise rates to recover that lost revenue. Unfortunately, or fortunately if you don't like utility regulation and economic lectures, I have to stop there.

Happy St. Patrick's Day!

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