SEWER AND WATER PRICING AND INVESTMENT POLICIES TO IMPLEMENT URBAN GROWTH POLICY1

Abstract

ABSTRACT. The article proposes the use of certain water and sewer extension pricing and investment policies. Such policies would complement an urban growth policy designed to guide the location and timing of growth in urbanizing areas. Proposed pricing policies are based upon marginal cost principles. The types of pricing policies discussed include benefit assessments, connection fees, and user charges. Proposed investment policies deal with the division of financing responsiblities between the public and private sectors. Discussion of each proposal explains the economic influence of the proposed policies upon key decision makers in the land development process. The application of proposed pricing and investment policies in the case study communities is mixed. In Knoxville, Tennessee, where pricing and investment policies reflect the proposed policies, no urban growth policy exists. In Lexington, Kentucky, mixed pricing and investment policies do not complement what is a relatively good urban growth policy. In Greensboro, North Carolina, reasonably effective pricing and investment policies complement other policies which provide some guidance to the urban growth pattern. It is hoped that the article will increase the recognition of utility pricing and investment policies as one means of implementing urban growth policy.