Risky Business: Why Measure W is Inefficient

Droughts affect more than just the water supply. They cause problems to the environment, agriculture, livelihoods and personal
bank accounts. However, many of the consequences for irregular rain patterns
could result in irresponsible policy changes that could be detrimental in the
long run. As we speak, Claremont is facing a potential policy challenge that could
result in more Claremont residents paying more for water.

As we learned in last week’s TSL article “Amid
Rising Rates, City Engulfed in Tense Water Dispute,” on the Nov. 4 ballot in Claremont is Measure W. If approved, the measure will authorize the city to issue revenue bonds that would support the city’s endeavor to gain control of the water supply from Golden State
Water Company. The corporation controls the system used to transport water to Claremont for its
35,000 residents. A “Yes” majority will move the city closer to acquiring the
apparatus, a purchase that could cost between $55 million and $222 million.

Though proponents of Measure W believe that transferring
control of the water system would decrease costs, critics argue
otherwise. Financially speaking, paying tens of millions of dollars for a supposedly
quick solution to the water problems does not present a good return on an
investment. Instead of spending money on infrastructure, public education and
other necessary programs, purchase of the water system would result in that money being allocated
to a program that could result in higher water bills with no additional benefit. 

Estimates made in a study suggest that the average Claremont resident would pay current monthly
fees, plus an extra $101.42 per month for the next 30 years. The opportunity cost of that extra $100 could be a new set of children’s clothes, school supplies or books—every month for the next three decades.

Every dollar counts in a household, regardless of your
socioeconomic status. Even though the Great Recession ended years ago, the
aftershocks still affect people’s preferences and budgetary constraints. Any
alteration in such things could destabilize households and lead to unintended
consequences for someone’s livelihood.

To say that acquiring public control of water is more
important than acknowledging additional costs in water bills ignores the
potential plights of Claremont residents who fall both below the mean income
of $105,000 and median of $78,000. Many Claremont students understand the difficult
choices families face under financial burdens, so I believe they’d understand
the gravity of purchasing the water system for these families.

Purchasing the system would not only cause problems with households, but
also with small businesses. Claremont consists of many small businesses,
including dozens in the Village. Like individual households, small businesses
confront numerous fiscal challenges that could affect the probability of
surviving in the market. Every business has two goals: to minimize costs and to
maximize profits. Any increase in costs could reduce profits, resulting in
potential wage cuts and an inability to purchase inventory. For example, a
pizzeria could increase wages for its employees with that extra $100 that would
go to water fees. Since every dollar counts, the chance to increase wages is
better than spending that money on increased water costs.

The proponents of the measure cite sustainability as one of
the major reasons to transition from private ownership of the apparatus to
public ownership. In theory, if Claremont controls the apparatus, it can
create its own cost structures to compensate for those who use less water. The problem with such an argument is that Claremont still needs to
use public funds to acquire the apparatus from Golden State, hence the town would
need to find a way to cut its deficit—and what better way to do that than to
increase the price of water bills? This is ironic, because Claremont would
trade its sustainable budget in order to possibly
be more sustainable with water usage.

Such tradeoffs do not seem plausible, especially with the
hefty price tag that comes with the apparatus in the first place.

Measure W exemplifies another policy measure that jumps the
gun in the face of an immediate crisis without properly assessing the
consequences. A common example of such an action includes when the U.S. government
voted on an $831 billion stimulus package to counter the
recession. Though one can argue whether or not the stimulus package worked, it
demonstrates an instance where the government spent public money to address immediate problems without acknowledging the potential adverse effects down the
road.

This goes back to the issue of uncertainty. Operating under such conditions presents various dangers in making decisions about how to address perpetuating problems in our society. In our generation, most of us strive for instant gratification, where we expect problems to be fixed immediately or that we get rewarded for positive actions we take to better society and ourselves. Looking at the short-term effects of our decisions remains far more popular than looking at the longer-term implications of the decisions that we have made. 

However, we do know the following: Today, nearly six years
after the stimulus was passed, the United States government faces a continuous
deficit that may increase down the road. Even though the deficit has decreased
during Obama’s presidency, current policies and laws project increased
government spending, which will result in a larger deficit and increased debt
in the country. On a macrocosmic scale, such increases in public spending
prevent the government from possessing the means to fund other programs and serve
the interests of the nation.

The same principles can be applied on a microcosmic scale. Claremont should not spend potentially a fifth of a billion dollars on a
quick fix to the water crisis. The student body should recognize that towns
like Claremont should invest public funds into the future, specifically in
education and on infrastructure, rather than using such funds to solve problems
that are not within their control.

Claremont students
should recognize that any investment should see the best returns. Spending millions
on a unbroken water apparatus is comparable to spending on a winter coat in the
desert. 

 Elliott Hamilton PZ ’15 is an economics major and a politics minor. He is the Jewish Identity Chairman and a Founding Father of the Alpha Epsilon Pi fraternity.

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