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Thursday Thoughts

Yesterday’s post took a lot of time to research and put together so I don’t have a whole lot for you today, but I’ve got enough to keep life interesting.  Here you go…

  • Although Mitch Daniels doesn’t step down as Governor until 2012, word on the street is that the camps of two serious Republican contenders for the job are going at each other like it’s nobody’s business.  I’ll let you figure out which two.
  • Speaking of  Governor, add a new name to the potential list of Democrats who may run in 2012, 8th District Congressman Brad Ellsworth.
  • With Joe Hogsett getting out of the race for Mayor this week, one big benefactor may be Brian Williams.  Williams reportedly is lining up major campaign contributors which could put his war chest in the millions.
  • Indianapolis Water says it may change the way it bills customers.  The utility is asking for a 35% rate increase for “infrastructure” improvements.  Matt Klein says currently customers who use more water pay less for usage on average.  Klein says they are looking at a measure that would change that so the more water a customer uses, the more they will be charged for usage.
  • If efforts to bring a total smoking ban to Indy do materialize, anti-smoking advocates will still have to battle their arch nemesis, Brad Klopfenstein.  Klopfenstein, former head of the Indiana Licensed beverage Association, is volunteering his time to local bar and tavern owners to help fight a possible ban.

That’s all I got for today.  What are you hearing?

  • Think Again

    Brad is “former” head of the association? What's his job now? I had no idea he'd moved…he's a talented guy.

    I'm guessing your GOP gubernatorial foes are Rokita and the lite Gov–am I right?

    Oh joy. We Dems will sit back and watch THAT catfight. Tweedle dum and tweedle dummer. Hilarious. More details, please.

    Maybe she can challenge him to a Mercedes convertible dragrace in the Capitol parking lot.

  • varangianguard

    Funny post TA. Somehow my mind read “dragrace” as “disgrace” in your post. Funny how my mind works sometimes.

  • Nick

    “Matt Klein says currently customers who use more water pay less for usage on average.”

    You must be referring to the sweet heart deals that commercial water users pay the water company since residential users are uniformly priced and charged on the volume of water.

    Please correct me if he is referring to residential users since they already subsidise commercial users “volume discounts”.

  • Think Again

    Nick, “sweetheart” is one word.

    And, commercial customers and residential customers of every single utility in America pay different rates based largely on volume discounts. 'Tis so and has been so for decades.

    Indianapolis residents are spoiled. In water-scarce locales, rates are 2-5X higher. And we don't conserve worth a damn. Some of IWC's pipes are 50-60 years old or more–there is a large main on Hoover Road that they've torn up every 2-3 years for a long time. Most folks have a similar story in their region of town…they're basically repairing the same pipe breaks over and over again, instead of putting in better pipes, to save money. The repairs are becoming chewing gum and baling wire holding together older pipes, and they need new pipes. Not to mention the tearing up of streets and sidewalks, which they rarely restore to original condition.

    That said, there shouldn't be a wholesale license for Veiola or whoever it is, to take unneeded money. I heard Matt this morning–a very competent spokesperson. It sounds as if the improvements being made to our water system are for conformity to national clean-water mandates.

    Which I want them to do. Here's a dirty little secret: most water users don't have separate sewer meters. So the sewer rates are a fraction of the water rates. So our sewer rates are going to go up, too, in concert with water rates.

    We need more sanitary and storm sewers in this county, so I'm not griping. But it's often left out of the discussion, and it's a LOT of money.

  • Nick

    This problem has been around for a long time.

    Just ask Jim Morris, who now works for the Pacers.

  • seanshepard

    I don't see what the issue is with “volume discounts” which are typical in all manner of industries and products or services.

    (just making stuff up here to use as an example, but…)

    You buy 1 gallon it's a dollar (total bill $1.00)
    You buy 5 gallons they are 90 cents each (total bill $4.50)
    You buy 50 gallons they are 80 cents each (total bill $40.00)

    There is a basically some fixed cost to provide basic service, maintain computer records, provide customer support, read a meter, print an invoice, provide postage and process a payment. And, as it is with many businesses, each additional item (in this case gallons) delivered to a customer is theoretically cheaper.

    The problem we have here seems to be that the city and/or the water company has not sufficiently invested along the way.

    Do our politicians not realize that they make choices when they build big sports stadiums or transfer tax money to private organizations without fair exchange for a product or service? Do we need to fix our water and sewer systems before spending money on a new hospital? Does $5 million in “crime prevent grants” to churches and private organizations REALLY need to go out of the city budget this year? Or a million dollars for “the arts”?

    You and I can't have a house that is falling apart, go strap ourselves to a brand new Lexus payment and a time share in Belize (mmmm… Lucas Oil Stadium) and then complain that we can't afford to fix up our crumbling house and go mug people to get more money (what government does – people with guns will eventually show up if you don't pay your taxes, you have no free market choice in water service provider [protected government monopoly])

    I have no problem with reasonable rate increases as required to keep up with the devaluation of our currency by the Federal Government (happens when they print, spend and borrow too much money). But, basic maintenance of infrastructure and equipment should be built into their cost model on an ongoing basis.

    Just like an Internet provider, for example, who must build the cost of the equipment, higher capacity backbone services and technology upgrades into their monthly rate(s) … In fact, again, economies of scale often lead to a lower cost per unit delivered.

    I'd also love to see projections on when they think they may run out of reservoir capacity (if ever) and what what kind of savings (assuming it's eventually an issue) they are setting aside or debt reduction they are undertaking to someday acquire land, build or expand such capacity whether it's a couple of decades or 50 years from now. I thought about this item when the emergency water plan came up for a vote before the Council several months back.

  • pcr_87

    Sean,

    The problem with your economic model is that it is a private (i.e. non-government) business model meant to encourage sales. Businesses want to increase sales, and therefore profit. Normally, I strongly prefer the private business model to the govt. model, but not with a resource like water. We should want people to reduce water use, and therefore should have a sales model that decreases “sales” of water. I recommend that the first XXX gallons of water use each month be sold at a lower price. If a residence or business goes over that quantity, it pays a higher amount. This would encourage lower water use and lead to the use of more efficient technology (higher efficiency toilets, shower heads, washing machinest) etc.

  • seanshepard

    PCR_87 … I understand that difference. My position would be that the government shouldn't be engaged in what should be private enterprise nor creating monopoly territories for such.

    BUT, at the end of the day, if the government is going to engage in what should be private business interests do we not expect them to run it as one or do we seriously intend for them to use pricing mechanisms to manipulate human behavior (you and me). At the end of the day, it still costs more to deliver the first few gallons than the last few.

    As far as it being a scarce resource … While we don't quite live on Caladan this isn't quite Arrakis either. I understand the need to be cognizant of our use of resources, but I have faith and trust in free markets, technological innovation and the ambition of individuals to always want to meet the needs of the marketplace.

    And, quite frankly, the government needs to stay the hell out of my bathroom, toilet and shower. Does it ever occur to anyone how massive and intrusive government is when it is telling you (as they do with the water capacity of your toilet bowl) what kind of toilet or shower head you can use? Odd that so few people see how ludicrous that is and how far beyond “fire, police, enforcement of legal contracts, roads and national defense” government has gone.

  • pcr_87

    Appreciate the Dune references…..

    Still, while I am for limited govt. as much as the next guy, I am also very much a practicalist. The protection of our natural and national resources is one of the few purposes that govt. is uniquely qualified to perform. If we are going to have quasi-govt. entities like the water company, gas company, and so on, the least we can do is have those companies run in the best manner for ensuring those resources don't run out.

  • Think Again

    You're both dancing around a major point here: the water company and Citizens Gas are publicly-owned municipal corporations, NOT investor-owned utilities. As such, they're required to maintain their infrastructure on a cost basis, and they aren't allowed the same depreciation schedules as the other investor-owned utilities.

    In that vein, someone needs to tell them they DON'T need to spend money on advertising, Colts tickets, etc. They're a captive monopoly. They need to operate with leaner management than typical utilities, because we own them.

    If an aging water line system is not kept current, the cost to repair builds exponentially. IWC hasn't stayed current for 20 years–because the political power structure has wanted to keep rates artifically low.

    Some lines are so bad they leak thousands of gallons of water underground daily. I can name four spots on the northside where that happens today, and has for a long time. That can't continue. It's wasteful, for one thing. It diminishes water pressure, and it encourages further corruption of the lines by allowing the introduction of excess air and gravel/dirt into the system.

    The “kepe the cost low” mantra is hovering around another major infrstructure concern–IPL. We've had the cheapest metro electric rates for 30 years. All the while, IPL has not spent the money required by the Clean Air Act to clena up their smokestacks. They'll tell you they have, but they haven't.

    Which has led to the whole “cap and trade” argument you hear now. Our Indiana coal-burning power plants are hopelessly behind the curve in the clean air category, and now the cleanup bill is huge.

    But hey, we've had cheap rates since 1969.

  • wilson46201

    Where in any Constitution are “fire and police” written? These are comparatively new governmental functions dating only from around the same time as the 1848 Communist Manisfesto. Nowadays even the Libertarians take “government fire and police” as a natural, FoundingFather-given. Taint so!

  • wilson46201

    The city gas company was privately owned until the 1920s when it went bankrupt so Citizens Gas (a trust) was created to continue its functions.
    Until it was “nationalized” in 1999, our water supply was the country's largest privately owned water company and had been so since 1876.
    For that matter, city buses and trolleys here were a private business until 1974 when bankruptcy again forced the city to step in and continue service by “nationalizing” the operations.

  • seanshepard

    Wilson – certainly there is a provision for a Sheriff in the state constitution:

    Section 2. County officers; clerk of circuit court, auditor, recorder,
    treasurer, sheriff, coroner and surveyor; election

    Section 2. There shall be elected, in each county by the voters
    thereof, at the time of holding general elections, a Clerk of the
    Circuit Court, Auditor, Recorder, Treasurer, Sheriff, Coroner, and
    Surveyor, who shall, severally, hold their offices for four years; and
    no person shall be eligible to the office of Clerk, Auditor, Recorder,
    Treasurer, Sheriff, coroner more than eight years in any period of
    twelve years.

    As for fire. I personally believe that private fire protection could work, could be competitive in nature. It could be subscription based (you pick provider A or provider B based on various factors), it would probably cost $200 a year (or less) or so and would be escrowed by mortgage companies, required by both mortgage and insurance companies. You could have “uninsured neighbor” coverage and/or your insurance company might get a one-time bill if services are ever used. It's just one thought.

    Police is trickier obviously. At the Federal level, since you mention the founding fathers, clearly there is no provision for the federal government to have police or fire protection powers (outside of protecting free interstate commerce or protection against espionage and maybe a few other areas).

  • wilson46201

    You're absolutely right about the longtime existence of Sheriffs but “police” as such (and separate) are fairly new.

  • pascal

    Strange that “bankrupt” means that the only possible answer is “socialism” and the lack of performance that socialism always entails. I'd imagine that both banrupt situations noted above were aided into being so by your favorite local, state, and national governments. The same phony argument applies also to government schools.

  • wilson46201

    Why does “pascal” hate I.U. & Purdue (state universities)?

  • pascal

    Nothing says that Mitch will stick around to the end of his term. He does not live or die by cheap politics. He doesn't need this job and might very well pull out of it when he thinks his accomplishments will be limited. Doesn't mean he is a quitter just that other talents might have a chance to carry the load. There are plenty of things to do with his life other than herding idiots.

  • pascal

    No hate is involved.

  • pascal

    Nothing says that Mitch will stick around to the end of his term. He does not live or die by cheap politics. He doesn't need this job and might very well pull out of it when he thinks his accomplishments will be limited. Doesn't mean he is a quitter just that other talents might have a chance to carry the load. There are plenty of things to do with his life other than herding idiots.

  • pascal

    No hate is involved.

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