Bentonville Doubled Water Rates—Get Help Having This Tough Conversation in Your City
Across North America, elected officials are facing an impossible financial reality: The cost of maintaining infrastructure is outpacing available revenue. Cities are stretched thin, with roads, water systems and other essential services starting to break down.
Meanwhile, residents resist tax increases and previous councils overpromised infrastructure maintenance without ensuring the tax base could support it. This leaves local officials feeling stuck, forced to make difficult financial decisions with few good options.
Bentonville, Arkansas, is now starting to confront this challenge, showing how delaying tough financial decisions only makes them more painful and politically difficult. The city recently approved a doubling of water rates to keep up with infrastructure costs, reduce water loss, and address capital needs.
"The city needs to raise its water utility revenues to about $27 million to cover the water utility expenses the firm outlined in its financial plan, which it projects will exceed $40 million by 2030," Collin Drat, senior manager for Raftelis Financial Consultants, was quoted as saying. According to the Northwest Arkansas Democrat Gazette, the city's current water revenues reach only about $17 million.
While some view this move as necessary leadership, others see it as a sign of desperation. The decision was met with strong public opposition, and the city council debated alternatives, including delaying part of the increase or cutting other budget areas. In the end, they moved forward, acknowledging that the financial burden of maintaining aging infrastructure could no longer be ignored.
This seems messy, but what is going on in Bentonville is the financial reality for cities everywhere. Growth often comes with new revenue, but basic maintenance generally does not. Over the past 75 years, cities chased growth and expanded rapidly without much concern for long-term maintenance costs. Nobody bothered to discern whether they were generating a large enough tax base or enough ratepayers to justify the public money invested. It is obvious today that they were not.
Water systems, roads and other public utilities don’t last forever. The maintenance can be deferred for a time, but it always comes due. This has local leaders scrambling when urgent repairs become unavoidable. And, of course, that’s the worst time to address the problem.
These difficult conversations are inevitable, but cities don’t have to wait until they are forced into crisis mode. The time to start discussing financial health is now. Today’s leaders don’t have to do this alone.
Strong Towns has helped hundreds of communities have difficult but necessary conversations about their financial future. If your city is struggling with rising costs and stretched budgets, it’s time to take action. Book an event with Strong Towns, and we’ll come help start the conversation in your community. Let’s work together to create a financially resilient city before tough choices become impossible ones.
