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News

Towns sell their public water systems - and come to regret it

Elizabeth Douglass, The Washington Post on July 08, 2017

LAKE STATION, Ind. - This hard-luck town just south of Chicago is weighing a decision confronting many small and midsize cities with shrinking populations and chronic budget deficits: whether to sell the public water system to a for-profit corporation.

Lake Station desperately needs the cash. Once solidly middle-class, the town of 12,000 has suffered from cutbacks at nearby steel mills, statewide caps on property taxes, and debt incurred to build a pricey new City Hall.

Selling the water system would erase $11 million in utility debt and leave the city with a $9 million windfall. But the deal does not fund any of the water system’s $4 million in overdue repairs, costs that will be passed along through higher rates. Customers usually pay more for water after private companies take over.

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