Zero Flexibility on Sewer, Water Bills

I have been receiving questions and comments regarding the City of South Bend sewer and water bills for some time. I would like to offer the following explanation of how the water and sewer funds are managed. Sewer and water department funds are "proprietary" funds. This means that they have to be self-sustaining. Other city funds/monies are not legally allowed to be used for sewer or water. Also, sewer and water funds cannot be used for any other department. Neither can sewer funds be used for water funds or vice versa. This means that cutting police officers, as some people have suggested, would do nothing to offset the costs of the sewer and water bills to the public. The police department funds come from a separate account that cannot be co-mingled with sewer or water accounts.

It also means that any costs for infrastructure upgrades must be borne by the citizens. This is why it is so difficult to pay for line replacements and other ongoing maintenance projects and upgrades. The benefits of completing large maintenance and upgrade projects must be weighed against the impact it will have on customer billing. That is why cities have so much aging infrastructure and consistently do large maintenance projects on a "have to" basis - typically when that portion of infrastructure fails.

People also ask why we don't use more grant funding. Grant funding for the most part is unavailable for ongoing maintenance. There are some grants available for project planning, new infrastructure projects, and large line replacement projects (like the upcoming Central Avenue sewer replacement project). Many grants (like Community Development Block Grants) are limited to one project per year per city. Most grants are highly competitive because every city has numerous projects needing to be done without enough funding. Consequently, cities prioritize their projects and apply for grant funding on a worst case basis - the infrastructure most likely to fail in the near future. The other projects have to wait to be completed until the next grant cycle in the following year or the city may decide the project can't be postponed and they have to finance the project with loan funding and increase the customer billing to pay for it. Of course, there are always the dreaded unfunded mandates forced upon cities by state or federal statutes (like the sewer treatment plant) that force cities to accrue large loans in order to be in compliance or face heavy financial penalties.

In short, there is zero flexibility in how sewer, water, garbage, and mosquito accounts are funded or managed. By law they have to be "self-sustaining" and cannot operate in the red which means that any shortfall in funding must be passed on to the citizens through the monthly billing. Cutting expenses in other accounts will do nothing to help lower sewer or water bills.

Julie Struck

Mayor of South Bend