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Mission Impossible: Rate structures that are ‘fair’ to everyone

Posted: January 24, 2013 - 4:11pm

There’s one more thing that’s as certain as death and taxes and that’s the fair vs. unfair debate that’s bound to erupt when taxes/fees/rates of any kind change.

Generally, if the change means you’ll pay less, the change is fair. If the change means you’ll pay more, the change is unfair. 

Take Homer’s water-sewer rates, for example. A task force has released a new draft schedule proposing some changes. Most people would see a drop in what they pay for water and sewer services, but not everyone — particularly users on the Homer Spit. 

Spit users say the proposal is flawed because they would pay more than their fair share. Those who favor the rate changes say it’s fair because it’s based on a cost-causer, cost-payer schedule in which those who require higher service costs pay their share of the costs.

On the one hand, that makes sense. On the other hand, aren’t we all in this together? Should residents and businesses who are part of the community pay more for a given service because their particular location means the cost of providing a service is more expensive?

The fair vs. unfair debate also comes into play when something new comes down the pike. Take getting natural gas to Homer, for example.

In that debate, condominium owners say they should not be assessed the same amount as individual property owners, as is now proposed, because the condominium association building is on one lot just as an apartment building is. Again, on the one hand, the argument makes sense. On the other hand, condos aren’t apartments.

Whenever water-sewer rates are discussed, those in the know say the problem is the water and sewer system is large and expensive and doesn’t have many users. In the discussion over how best to get natural gas to Homer residents, the city’s water-sewer system has been used as an example of how not to do it. More users are needed to spread the cost out more evenly in that system, say city officials. 

That’s why we appreciate the way the city is proposing building the gas distribution system — every property owner is assessed the same amount to pay for the distribution system. You don’t have to hook up if you don’t want to and you don’t have to convert even one of your appliances. But every property owner large and small shares the cost of making gas available to every community member. 

When it comes to rates of any kind, a good rule of thumb is: Those who use the most should pay the most … unless, of course, they use so much that delivery is actually cheaper because of their volume.

Which brings us back to the fair vs. unfair debate and what our parents taught us: Life isn’t fair. 

As we debate what rates who should pay, we’d probably do well to remember that. Deciding on a rate that’s fair in everyone’s perspective — well, that’s about as likely to happen as a week-long run of rainless 80-degree days next July. 

But we can come close. If the city can develop rate schedules that share the cost as equally as possible while minimizing the pain, that’s about as fair as fair gets.

 

 

 

 

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