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Beggar Thy Neighbor


What in the world does “Beggar Thy Neighbor” have to do with water and sewer systems.  A lot. 


First lets make sure we have a common understanding of what the term means. 

Beggar thy neighbor is trying to get someone else to pay for something you want.  For example:

Big City Hotel Taxes  

Both states and cities add exorbitant taxes and fees to a hotel bill.  In New York City it is about 15%, for hotel rates that are not cheap.  Who pays those taxes?  Not many city or state residents.  New York is “beggaring” money from travelers from all around the country.  They are taking advantage of the “destination” status of the city.  This happens in most cities. 

Toll Roads

The State of Delaware runs a “Beggar Thy Neighbor” operation on Interstate 95 at the Maryland border.  Coming or going, Delaware hits each car up for a $4.00 toll.  A semi‑tractor trailer pays $11.00.  Delaware collects about $140 million/yr this way.  Not very much of it is paid by Delaware residents.  Delaware is “Beggaring” east coast travelers. 

Beggar Thy Neighbor

It goes on in the sewer and water business several ways.

For example:

New Garden Sewer Sale  New Garden Township sold its sewer system to Aqua PA, a Big Water Company.  All the township residents benefit from the $29.5 million windfall.  But, only half of the residents use the sewer system.  That half are paying the full price of that windfall via exorbitant rate increases.  They are being “beggared” by those with septic systems. 

New Garden sewer customers  On the other hand, those same New Garden sewer customers are now “beggaring” their Pennsylvania neighbors.  Aqua acquired the system and raised rates by $2.6 million/yr (89%)..  However, $1.0 Million/yr of the increase was foisted off on other customers.  As a result, Aqua water customers 300 miles away in Warren County PA are subsidizing our sewer bills.  There is absolutely no connection between them.  Is it equitable? No, but it happens.  This is an example of ACT 11 distortions in rate setting (LINK).

Chester Water Authority (CWA)

The attempted sale of CWA is a move to “beggar” a small segment of the population to solve a state political problem.  The City of Chester is bankrupt.  State and local politicians propose to sell CWA to Aqua for $410 million.  If this comes to pass, who pays the resulting price for the doubling of water rates that will ensue?  Hint:  only 20% of CWA’s customers live in Chester City.  They will be “beggaring” the other 80%.  And, the state government gets off free. 

Selling A Regional Utility

The sale of a large municipal regional system can involve significant “beggaring”.  These systems will normally span multiple municipalities.  If one is sold, who gets the money and who pays the increased rates?  Clearly, everyone will pay the higher bills, but do all the municipalities share the sale proceeds?  Probably not.  Bucks County, PA has a regional sewer system that tried to do a billion dollar sale to Aqua.  It was eventually killed by pressure from surrounding municipalities that would not get their share of the sale proceeds. 


The bottom line is that Big Water acquiring municipal water and sewer systems can result in all kinds of inequalities.  If your system is a target, you should get involved and ask lots of questions.  Follow the money, it tells you a lot.  And, do not accept evasive answers – of which there will be many. 

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