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The High Cost of Conservation

Tuesday, December 8, 2009 by Slaughter Development

The administration at Central Michigan University has managed to reduce water consumption by nearly 10%. But to make up for lost revenue, the city of Mount Pleasant may need to raise water fees for everyone.

According to a report by writer Hilary Farrell:

Mount Pleasant’s enterprise funds in the 2010 budget are hit by several factors, including CMU’s conservation efforts in residence halls and other buildings. CMU is estimated to have used 20 million fewer gallons of water this year.

Mount Pleasant sold 834 million gallons of water in 2000 and 740 million gallons in 2008, [City Finance Director] Ridley said. The estimate for 2009 for the city is 670 million.

“This is a fairly significant decline in revenues.”

You can’t fault Central Michigan University either for saving water or reducing costs. Reducing consumption and lowering expenses are both laudable objectives. And it’s hard to blame the city of Mount Pleasant, who has charged by the gallon for eons and needs water revenue to pay their bills. A proposed fee increase of 2% would help cover these losses, but effectively punish everyone else for CMU’s efforts.

The situation hardly seems fair to anyone involved. Yet, instead of focusing on the outcomes we should think through the process. There’s more to the relationship between the city and the university than buying water. If Mount Pleasant had known about CMU’s conservation plans years in advance, they might have been able to conduct better budget projections. If Central Michigan University was consciously aware of their contribution to city water revenue, they might have been able to develop a more constructive plan.

The Methodology Blog has covered process-oriented thinking before as well as what happens when you get too good at conservation. Helping people think through stakeholder conflicts and workflow challenges is our business. If you’re looking to balance incentives, contact Slaughter Development. We’ll help you think and work smarter.

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