How We Subsidize Spread-out Places Via Utilities

Tweet about this on TwitterShare on Facebook0Share on Reddit5Share on LinkedIn2Print this pageEmail this to someone

makers-and-takers-arrow-1

Take a look at your utility bills. Is there any charge related to the amount of infrastructure it takes to serve you? Does it take many or relatively fewer feet of wire to deliver electricity to you? Water pipe? Sewer pipe? Does it take a pumping station to get your sewage out of a valley? There is no frontage charge on our bills. So for the same amount of usage, households closer together subsidize households further apart. Let’s take a look at Missouri American Water, the company that supplies water to St. Louis County, with the exception of Kirkwood.

Missouri American Water has 4,200 miles of water mains and 31,000 fire hydrants in St. Louis County. Bills are calculated with the sum of a minimum customer charge based on water meter diameter and usage (MO American Water rates).

Water Infrastructure Age{From Our Aging Water Infrastructure report by the Metro Water Infrastructure Partnership}

Our water infrastructure is aging. With so much needed to serve the spread-out places built after WWII now reaching end-of-life, the development choices of the past are coming home to roost today. Instead of paying into an infrastructure fund from day one to pay for its inevitable replacement, previous generations kicked the can to today.

Recognizing the need to replace old pipes, the Missouri Legislature authorized Missouri American Water to charge customers for infrastructure replacement in 2003. Missouri American Water added a fee on bills called the Infrastructure System Replacement Surcharge (ISRS). Since its inception, MO American Water has spent $445 million on improvements to water distribution and hydrant upgrades in St. Louis County. The rate is $0.7642 per 1000 gallons of water. Again no attempt to charge based on the amount of infrastructure needed to serve a costumer even in the fee that’s paying to replace the infrastructure.

ISRS is currently suspended due to the drop in St. Louis County population in the 2010 census (Drop in St. Louis County population throws wrench at water company).

According to the Our Aging Water Infrastructure report by the Metro Water Infrastructure Partnership, “About 70% of this is for indoor purposes such as showers, toilets, faucets, clothes washers, cooking, and food preparation while the remaining 30% is used outdoors.” We shouldn’t expect usage to be dominated by lot size. Household size is a bigger factor. So an infrastructure fee based on usage is a poor proxy for its cost. The same report says it costs $1M per mile to replace water mains. Let’s do the math and see who the winners and losers are in the ISRS rate structure.

$1M per mile / 5280 feet per mile = $189 / ft
Take half since there are usually homes on both sides of the street, $95/ft

Assume the pipes last 100 years. MO American Water says the typical customer is charged $3.09 per month for ISRS.
$3.09/month * 12 months per year * 100 years = $3708
$3708/$95/ft = 39 ft.

The typical user is paying for 39 feet of watermain. This means the rate is too low and, for average use, the maker versus taker point is near the low end of house frontage in St. Louis County. Add on top the homes that don’t have a neighbor across the street, pipes with no customers on either side, and that a 100-year lifetime is on the high end, it’s likely the rate is much too low.

Some frontage examples from around the county which pretty well traces the ever spreading out as our places became more and more auto-oriented:
140 foot spacing in Chesterfield on Country Side Manor Ct.
100 foot spacing in Ballwin on Bentshire Ct
89 foot spacing in Ellisville on La Dina PL
60 foot spacing in Crestwood on Greenview Dr
50 foot spacing in Rock Hill on Blossom Ln
40 foot spacing in Richmond Heights on Goff Ave
30 foot spacing in University City on Plymouth Ave

What might an ISRS rate based on frontage and that doesn’t kick the can to future generations be?
$95 per ft/100 years/12 months = 7.9 cents /mo /ft that is indexed with inflation of water main replacement costs. The household in Chesterfield would be paying $11.06 per month, and the household on Plymouth would be paying $2.37 per month.

Adding insult to injury, the makers have little say in the decisions to create more takers. When a city in our too-fragmented region zones for sparse land uses they are forcing others in other municipalities with no say in the decision to subsidize this choice. Once again we see how what happens on the other side of our municipal borders does indeed effect us.

Tweet about this on TwitterShare on Facebook0Share on Reddit5Share on LinkedIn2Print this pageEmail this to someone
  • gmichaud

    I think you are on to something. I started thinking about my 30 foot lot here off of Grand Ave. I came up with around 370 dollars a linear foot for sewer lines and if you figure a 50 year life it comes to about 200 per year vs about 800 per year for a 100 foot lot. You add in water, gas, electric. I don’t know but if they were billing by the front foot it would certainly be more accurate. As it is I’m guessing I pay at least 200 to 300 bucks a year to subsidize lavish lifestyles elsewhere. And then if you add in roads, replacement and maintenance plus the tax abatements I have to pay for wealthy insiders which I have estimated at at least 100 to 150 bucks a year, I’m likely paying 400 to 600 dollars a year to make sure Paul Mckee and people like him can live on over sized lots.
    Of course it is well within the ability of the utilities to calculate differences by lot size and it would actually help stem to absurd sprawl of the region.
    A key factor, is that the real estate people and all of the people making plenty of dough off this arrangement don’t want it to change. Fiscal responsibility is only for the poor and middle class.
    And of course none of the sprawl is sustainable in the long run.

    • rgbose

      We need to keep a close eye on lot widths in Northside Regeneration.

      • kjohnson04

        I’m starting to notice a trend toward that in UIC projects in my neighborhood. The street frontage is getting out hand already. We have three houses (1 on McRee, and 2 on Blaine) with frontage wide enough to build another two, possibly three houses on. Circled areas show where buildings are going up with excessive frontage. https://uploads.disquscdn.com/images/0bcf169a2145fd5cd26f6d690caebc36a1c542d2ef7b03340bb68198bc4a9d2b.png

        • rgbose

          Wow, the ones on McRee have 75′ and 50′ of frontage.

          • kjohnson04

            Yep. It’s getting suburban around here…

          • rgbose

            The cul-de-sacs and the space they take up on blocks to the east don’t help either.

    • rgbose
      • Justin

        This makes me want to puke every-time I drive past it.

        Also they appear to have an alley, so why is the garage facing the street? There are numerous houses like this on Delmar near Vandeventer too with front facing garages and it makes no sense to me.

        • rgbose

          Because that’s “normal”

      • gmichaud

        I know that’s terrible, I have seen other homes that are similar. It is the suburbanization of the city. If utilities were charged in reference to actual projected costs then it would likely cause developers to pause before they sprawl all over the place. My guesstimate without including roads as I mention above is probably in the 200 to 300 dollar range smaller lots are subsidizing larger ones for all utilities, the sewer being the most expensive. You have to figure that city residents are likely subsidizing utility and urban sprawl to the tune of millions of dollars a year.
        Beyond that it is insane the city allows these type of buildings at all. Alex references Cincinnati in the Friday open discussion (not sure why he doesn’t just leave the comments on, some interesting topics are brought up) Anyway I have looked at Helsinki, the City of London and San Francisco closely and for instance with Helsinki http://www.hel.fi/www/ksv/en (click on publications)
        you have a clear four step process where the public is invited to comment in three steps (see page 39 in the Helsinki City Planning Review 2016) this is in addition to the public being informed by the website and encouraging public participation in general.
        St. Louis does little or nothing to encourage discussion, it is pretty well a closed process where a developer only has to convince Otis Williams and a few of his minions at SLDC to support their work and then hand it off the the ridiculous board of aldermen with their aldermanic courtesy.
        I’m not saying projects like this wouldn’t happen, but I doubt they would if there was true public input, that plus any kind of understanding of urban design on the part of city officials.
        The supreme irony is that with a few clicks of the mouse people of St. Louis can learn far more about what is happening in Helsinki than their own city.
        A few comments about City of London and San Francisco. London’s approach is far different than Helsinki or San Francisco in that they set strategic goals that are revised every 5 years with public involvement. In addition there is a Statement of Community Involvement which outlines the responsibilities of the government to the public
        http://www.cityoflondon.gov.uk/services/environment-and-planning/planning/planning-policy/Pages/Statement-of-Community-Involvement.aspx
        San Francisco has some similarities to Helsinki, I really like their 8 elements of a great neighborhood
        http://sf-planning.org/eight-elements-great-neighborhood
        and they list projects being considered in a similar manner as Helsinki. A big problem for San Francisco is the lack of affordable housing and that failure in planning.
        In contrast Helsinki is planning for population increases of 10,000 per year and making provisions to build that many units, keeping a lid on outlandish price increases. This is in addition to constantly improving transit.
        St Louis is almost Neanderthal in its approach and of course the reason is city officials get to line pockets of wealthy insiders. It is why they don’t want to include the checks and balances that serious public involvement would bring.
        And that’s why crap like you show in the picture keeps getting built.

        • rgbose

          Those three houses paid all of $2,022 in property taxes last year.

          • gmichaud

            I looked on Geo St Louis, I guess two of the homes paid almost nothing and one paid the bulk of the amount. To get back to street frontage and why you are right to bring up what the width of a lot means. On West Belle it looks like one lot is about 200 ft wide, one 165 ft wide and the other 125 ft wide.
            This is where the road expense comes into play. I assume the city pays for all roadwork unless there is a grant involved. If you figure road maintenance at around 240 dollars a foot a 30 foot lot would cost around 7200 and a 200 foot lot about 48,000 dollars.( a new replacement road would be more like 800 to a 1000 dollars a foot)
            In addition to roads it makes services such as supplying transit more expensive.
            The city (and the region really) should have mechanisms in place to prevent or charge for the extra frontage, aside from utilities.
            And for the city especially density and transit should be central in all planning efforts.
            The one thing I like about the City of London and their unitary plan, now called local plan is they use strategic goals to define what developers should strive to accomplish.
            A personally prefer the organization of the earlier Unitary Plan (around the year 2000), but the principles remain the same in that preferred goals and policies are outlined to give all developers an idea of what is acceptable. The planning document of course covers everything from shopfronts, to transit, housing, parks, sustainable development and so on.
            They constantly review and do a formal update (with public input) every five years to ensure past policies are working.
            In contrast St Louis has a crude system of zoning that goes into no detail about what to expect without any guidelines stating what the community is trying to accomplish. Hence you get absurd projects like the new parking garage in Grand Center of the project on the Hill.
            Unfortunately form based zoning is only a little better and does not offer both the flexibility and the philosophical underpinning and framework of how the city should be developed.
            In any case there is no in depth consideration of the overall status of anything in St. Louis, the planning policy in St. Louis can best be described as “whatever”
            Just to give an idea what I am talking about. What the City of London Local Plan does is create a practical vision of what the city should look like. Note all of the boroughs surrounding the central city have similar local plans based on local conditions.
            For instance here is a policy on car parks
            Policy DM 16.6 Public car parks
            No new public car parks will be permitted in the City, including the temporary use of vacant sites. The redevelopment of existing public car parks for alternative land uses will be encouraged where it is demonstrated that they are no longer required.
            3.16.20 The City’s public car parks were mostly constructed during the 1960’s when car use was encouraged. Some are underused and provide an opportunity for conversion and redevelopment for other uses.
            Or here is an excerpt regarding transit
            (iii) encouraging the provision of infrastructure for alternative-fuel vehicles, such as off-street electric vehicle recharging points;
            (iv) using traffic management measures and street works permits to improve journey time reliability on the City’s roads;
            (v) requiring developers to demonstrate, through transport assessments, construction logistics plans, travel plans and delivery/servicing plans, how the environmental impacts and road danger of travel and servicing will be minimised, including through the use of river transport.
            or
            3.16.4 Increased public transport capacity, coupled with higher employment levels,will increase pedestrian numbers on the City’s already busy streets. Climate change may result in further impacts through localised flooding and high urban
            temperatures. These impacts must be addressed to provide efficient, safe and attractive walking routes through the City’s streets, lanes and walkways. The City Corporation has adopted a Road Danger Reduction Plan and introduced a 20 mph speed limit for the whole City.
            Or google City of London Local Plan and a link to a pdf file will come up.
            Is there anything going on in St. Louis that suggests concern for climate change or concern for providing attractive walking routes?

          • rgbose

            The City of St. Louis Adopts Sustainability Plan

            https://www.stlouis-mo.gov/sustainability/plan/

          • gmichaud

            I have seen it, It is pretty well worthless. Look at it this way, when the Great Streets Plan for Grand Ave. directly calls for parking garages in Grand Center to have commercial and apartments on the street and parking behind. A recommendation in the public interest to help maintain and enhance the walking environment in Grand Center. Then to turn around and have arrogant, elite insiders pretty well tell the public to stuff by building an autocentric garage in a prime location. And what’s worse the Board of Aldermen actually granted the developer about a million dollars in public money to tell the public to stuff it, it should be clear nothing but actual legislation that protects the public interests is required. The St. Louis Sustainability Plan does recommend legislation often, but the document has no meaning.
            Rather than 200 pages of another useless study instead it would be far better to create a Local Plan like the City of London. The document is also about 200 pages, It covers all aspects of development in the City. It has for each category such as Public Transit, Streets and Walkways includes a core strategy, policies, who will deliver and risk management.
            The plan distinguishes needs of different districts and gives developers in general a good deal of leeway, while at the same time setting clear standards.
            St. Louis would have different core strategies and policies than London, for instance the question of those large lots on Belle, they would be governed by core strategies that support transit, walking, density and so on, either by district or the city as a whole.
            A core strategy under Public Transit, Streets and Walkways might be “to insure all buildings in walking districts have good access to sidewalks and in general support the ability of the pedestrians move in environments that are desirable for walking. As a result parking lots along sidewalks should be discouraged”
            So whatever the core strategy says, and maybe it absolutely forbids parking lots in some districts, it becomes an outline for both the building of the city and guidelines for the developer as they decide their approach.
            The key thing here is that such legislation actually serves to encourage economic investment.
            It is a complicated subject, but finite, as the City of London Local Plan indicates.
            So while the whole of Londons’ Local Plan is sustainable they also have a sustainable section 11 pages long.
            I will post a couple of paragraphs from their sustainability section to give an idea how it works.

            “Core Strategic Policy CS15: Sustainable Development and Climate Change
            To enable City businesses and residents to make sustainable choices in their daily activities creating a more sustainable City, adapted to the changing climate, by:
            1. Requiring all redevelopment proposals to demonstrate the highest feasible and viable sustainability standards in the design, construction, operation and “end of life” phases of development. Proposals for major development should aim to achieve a BREEAM rating of “excellent” or “outstanding”. Residential development should aim to achieve a minimum standard of Code for Sustainable Homes level 4, rising to level 6 by 2016 or in line with government targets.
            2. Requiring development to minimise carbon emissions and contribute to a City wide reduction in emissions:
            (i) adopting energy-efficiency measures;
            (ii) enabling the use of decentralised energy, including the safeguarded Citigen Combined Cooling Heating and Power (CCHP) network, CCHPready designs in areas where CCHP networks are not yet available, and localised renewable energy technologies;
            (iii) adopting offsetting measures to achieve the Government’s zero carbon targets for buildings.
            3. Avoiding demolition through the reuse of existing buildings or their main structures, and minimising the disruption to businesses and residents, using sustainably sourced materials and conserving water resources.”

          • gmichaud

            There is a National Planning Policy Framework in England that directs local plans, like the City of London “The National Planning Policy Framework sets out the Government’s planning
            policies for England and how these are expected to be applied.”, and then they say later in the 65 page document, “The purpose of the planning system is to contribute to the achievement of sustainable development.”
            So sustainable development is legislation in England and with the Local Plans such as the City of London and is treated as a major factor in development.
            The flaw of St. Louis is that plans mostly become suggestions which are not followed. In England and in the City of London, such plans become integrated with the main Local Plan as law.
            It is important to note the the Local Plans don’t often forbid something but give the developer flexibility. However the purpose of the developers plan and meeting the overall goals of the local plan is how judgment is passed on approving a project.

            One last thing of note is that the City of London Local Plan is treated as a living document. Reviews are constantly made, changes in the local plan can and do occur, this is addition to a major reevaluation every 5 years or so.
            This is all done with public participation included in the process.

            It is a far more sophisticated system of planning than St. Louis.
            The St Louis sustainability plan is a static and a dead document, completely divorced from legislation.

          • kjohnson04

            And if the property they replaced had been allowed to remain, the property tax rolls would have probably been 10 times as much.

      • kjohnson04

        Darn tooting. That’s a travesty.

  • This article serves as another important reminder that ‘personal’ decisions have consequences for the entire community. The ‘infrastructure of sprawl’ is a creeping menace to this region. Aside from water lines, we have outsized roadways (especially in N. County) , tons of community parks that serve low population density areas, an expansive sewer system, the list goes on.

    As this stuff begins to age and require replacement, many people look for an easy out, blaming funding shortfalls on local and state politicians. Then, they use the perceived lack of civic ‘progress’ as a reason to withhold tax increases. Lather. Rinse. Repeat. Eventually, you’re stuck with large swaths of relatively desolate, untenable ‘development’.

    All of this seems fairly obvious but the fact that the water system is operating in a communal manner, thereby perpetuating the issue, was news to me. It’s also something that could be righted, it seems, with a simple legislative fix. We’ll have to see if any legislators want to take up such a mundane and likely unpopular cause, though.

    • rgbose

      Another outcome as these things age is people get fed up with the deterioration, don’t want higher taxes/bills, flee to the next new area further out, and blame the poor people left behind for the spiraling decline.

      There are government decisions here too. Extending/widening roads, zoning, minimum lot sizes, what loans gov’t will back etc all play into this.

      Since ISRS got tossed by the courts, maybe MoLeg will look at it again. I’m not optimistic they realize or care to take out the subsidy for spread out places inherent in a $/gallon rate structure.