City governments have long admired the money making ability of a water or sewer utility.  The enterprise funds are not tax based and, after all, they are natural monopolies where the cities could charge nearly anything they wanted.  Plundering enterprise funds to shore up budgets elsewhere is an old practice, and it’s one of the reasons why water and sewer utility infrastructure is so very underfunded right now in America.  Case in point today:  Augusta, Georgia.

Here is a utility with a tidy reserve fund of about $65 million and, with the City in a big budget crunch elsewhere, the fingers are already in the pie.  The real shame here is that this is a city with experience – bad experience – in what happens when you spend your water revenues on other things and, by default, fail to fund needed infrastructure improvements.  In the 1990′s, the City saw lots of main blow outs and similar problems while the City was pilfering the water reserve funds.  At least one councilman remains on the Council from that time and he’s warning his colleagues NOT to make history repeat.

It will be interesting to see what happens, but once the raiding starts it usually takes something severe to make it stop.  Once you go to the cookie jar, it’s hard not to go back.  Why do the tough things to balance the budget when you can raid the enterprise fund instead and increase water rates instead of taxes?  These situations seldom end well. Let’s hope Augusta gets it right.