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May 15, 2025 44 mins

In this episode of Everyday Environment, hosts Amy and Abigail explore the puzzle of water pricing with guest Margaret Schneemann, Water Resource Economics Specialist with Illinois Extension and Illinois-Indiana Sea Grant. From aging infrastructure and economic planning to affordability and policy decisions, Margaret helps piece together the many factors that influence what we pay for water. Tune in for a deep dive into the hidden systems—and tough choices—behind every drop from your tap. 

Resources to learn more:

Questions? We'd love to hear from you!
Abigail Garofalo aeg9@illinois.edu, Erin Garrett emedvecz@illinois.edu, Amy Lefringhouse heberlei@illinois.edu 

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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Amy Lefringhouse (00:06):
Welcome to another episode of the Everyday
Environment podcast where weexplore the environment we see
every day. I'm your host, AmyLefringhouse.

Abigail Garofalo (00:14):
And I'm your cohost, Abigail Garofalo.

Amy Lefringhouse (00:16):
And today, we have a really interesting topic
that we are going to quote diveinto since our theme is water. I
feel like we've said that almostevery single episode possibly.
But we have Margaret Schneemannhere with us today, and she is
the water resources economistwith Illinois Extension and

(00:38):
Illinois Indiana Sea Grant. Sowith that, we want to say
welcome, Margaret. Thank you somuch for being with us today.

Margaret Schneemann (00:46):
Thank you so much for having me.

Amy Lefringhouse (00:49):
Well, we really want to know more about
what you do with Sea Grant andwith the Illinois Extension.
Tell us about your job.

Margaret Schneemann (00:59):
Yeah. So as you say, my title is water
resource economist. I am aenvironmental economist by
training, but what I do by tradeis really urban planning. My in
my position, I am located inChicago, and I'm located at an
agency called the ChicagoMetropolitan Agency for
Planning, and they are thedesignated planning agency for

(01:20):
the greater Chicago region. So,really, most of my effort goes
towards assisting CMAP as interms of leading economic
analyses to support develop thedevelopment and implementation
of sustainable water and watersupply planning for the Chicago
region.
And whether that's planning atthe state level, the regional

(01:42):
level, the subregional level, orat the county and local level,
really assisting all thoselevels of government and folks
with water supply planning.

Abigail Garofalo (01:52):
So making sure communities, different
municipalities have enough waterfor their residents. Is that
kind of what we're thinkinghere?

Margaret Schneemann (02:00):
Yeah. Well, we can't really assure that
communities have enough water,but we can provide outreach to
them in terms of what we knowabout our water supply sources.
And also on the socioeconomicside, which is my specialty on
the economic side, reallyleveraging our data about what

(02:22):
we know about socioeconomics. Sowhat do we know about population
growth? What do we know aboutemployment growth?
And how is that growth gonnainfluence water demand? And
combining that water demandinformation with what we know
about available water supply tosee if there's going to be
enough water, if there's goingto be a shortage of water, and
then helping communities addresswhat they might need to do.

Amy Lefringhouse (02:45):
As far as money. Right? Like, you're
thinking like, oh gosh. How arethey going to pay for the water
supply infrastructure and allthat that stuff too? So there's
like a million different piecesof data that you're putting
together like a puzzle.
Right?

Margaret Schneemann (03:03):
Correct. You really hit the nail on the
head. There's really two thingsto attend to. So one is what we
would consider the geographicalproblem, is really with how much
water is there physically in theearth, but then that second
piece is really this water needsto somehow get extracted,

(03:23):
pumped, treated, and deliveredto Illinois residences and
businesses, and of course, thatrequires infrastructure. So that
requires a water treatmentplant.
It requires pipes. It requirespumps. Yeah. And so how are we
going to pay for all thatinfrastructure? What is the
capacity of that infrastructureto meet demand?

(03:43):
So lots of issues to detangleabout providing water.

Abigail Garofalo (03:48):
Yeah. What a great culmination of all the
things we've been talking at thehigh season. Right? We've talked
with the, like, communityplanning. We've talked about
storm water.
We've talked about justsustainable development, things
like that. A lot of the thingswe talk about is the aging
infrastructure or how does itget from one place to another,
and wow, you're just this isjust great thoughts on, oh,

(04:12):
okay. Like, here's how we getthere, and here's all the pieces
that kind of come together aspart of a puzzle to get the
water where we needed to go andto also take into account the
the existing pieces that arethere too.

Margaret Schneemann (04:23):
Yeah. Absolutely. I was

Amy Lefringhouse (04:24):
just thinking about, you know, when we turn on
our tap water, there's a lot ofwork that is done behind the
scenes to make that happen. And,again, I've said this in other
podcasts this season, but wesometimes take it for granted.

Margaret Schneemann (04:38):
Oh, absolutely. Yes. The perception
that water is just there thatyou could walk over up here in
Chicago to Lake Michigan andjust put a cup in the lake and
drink the water. Obviously, Idon't know too many people who
would do that. Reallyunderstanding the huge amount of
work that our water systems needto do to extract, like I said,

(05:01):
extract that water, pump thatwater, treat that water, deliver
that water just from source totap on appreciating the level of
effort and the cost to reallyget that done.

Abigail Garofalo (05:13):
Mhmm. So speaking of cost too, why why is
water pricing important?

Margaret Schneemann (05:18):
Sure. Well, there's lots of reasons that
price of water is important.Because I'm an economist, I
might just explain that pricesmatter. Right? So economists
think a lot about prices.
In economics, we really viewprices as providing an economic
incentive that can both explainpeople's behavior as well as
influence people's behavior. Andso this really means that the

(05:41):
price of something sends us asignal that we then react to. So
for example, when prices rise,we buy less. If prices fall, we
tend to buy more. And ineconomics, we call that the law
of demand.
So this law really holds truefor everything, even things that
are essential and necessary forlife like water. Because water
is essential and we need it tolive, it really makes pricing of

(06:02):
water even more of an importantissue. Water's unique. It still
does follow the law of demand,meaning if the price of water
rises, we buy less. Butobviously, there's only so much
less water we can buy.
Right? We may be able to cutback on discretionary uses of
water such as watering our lawnsor using water outside to play

(06:22):
in the summer. We try to be moreefficient with water. Right? We
could install low flow toiletsor turn the tap off when we
brush our teeth as someexamples.
But at some point, we really doneed water, and we're going to
have to get that water for ouressential uses like drinking,
cooking, and cleaning, and we'regonna have to pay the price for

(06:43):
it.

Amy Lefringhouse (06:43):
Gosh. This brings me back to I took an
environmental economics class incollege. And, you know, when
you're going into environmentalscience or natural resources or
whatever, you're taking lots ofscience classes, right? And I
was like, no, no, no, I'mlearning about all the then I
took economics, I was like,what? What is all of this that
we have to take intoconsideration when we're trying

(07:06):
to figure out and find solutionsfor environmental challenges?
So this is just like bringing meback to those days, Margaret,
where my instructor or myprofessor was teaching me about
the cost of recycling, you know.

Margaret Schneemann (07:20):
I will I will confess that what I'm
trying to explain when I firstlearned this concept in
undergrad, did almost drop myeconomics course, and the
concept I'm trying to get at iswhat we call the price
elasticity of demand, and it wasreally a lot to take in. So with
water, when we talk about thelaw of demand and behavior and

(07:42):
that incentive that prices sendto people, water, again, is
unique because when the pricerises, you're still gonna follow
the law of demand and buy less,but there's only so far demand
can fall. Right? Because peopleneed the water. It's a
necessity.
We say that demand for water isprice inelastic. Demand's gonna
fall, but it can only fall sofar.

Amy Lefringhouse (08:03):
Well, how do you then determine the price of
water? I mean, gosh, this islike a simple question probably
with a very complex answer. Butin layman's terms, Margaret, how
how is that price determined?

Margaret Schneemann (08:18):
Right. In theory, we know a lot about
water pricing. There's reallyexhaustive industry guidance
available in terms of bestmanagement practices for setting
water rates. For example, anindustry organization such as
the American Water WorksAssociation has standards of
practice manuals on water ratesetting best practices. But in

(08:40):
terms of what is actuallyhappening on the ground in our
communities with setting waterprices, we actually don't know
that much about how communitieshere in Illinois are setting
water rates.
There's no requirement thatcommunities actually follow
these best practices.Communities have a lot of
discretion in in what they do toactually set water prices.

Abigail Garofalo (09:01):
So it could kind of be it's it could be like
an an abstract determinant, butwhat are the essential, I guess,
like, factors that people mightwanna look at when looking at
water pricing?

Margaret Schneemann (09:11):
In terms of thinking about water pricing,
the most important water pricingprinciple is something we call
full cost water pricing, andthat is the number one objective
of water prices, meaning that atthe end of the day, why are we
charging for water? We'recharging for water because we

(09:31):
need revenue. Why do we needrevenue? Well, we need to pay
for all these things that wetalked about earlier. Right?
That that we need to pay for thepumps, for the treatment, for
the chemicals, to treat thewater, for the energy, to
deliver the water. So none ofthat is free. Infrastructure, of
course, as we alluded toearlier, a lot of the
infrastructure has been in theground for hundreds of years. We

(09:53):
have the aging infrastructuresituation. On top of that, we
have lead service linereplacement act, which is
requiring water utilities toinventory and replace lead
service lines.
We have emerging chemicals, likeforever chemicals, like PFAS
that we water utilities are nowgoing to have to address. So, of

(10:16):
course, all of that costs costsmoney. One of the interesting
things in Illinois about waterpricing is that in many states,
water utilities are actuallyregulated because water
utilities are public utilities.Many states do regulate water
utilities at the state level,and that does lend some
transparency in terms of whatutilities are actually doing to

(10:39):
set those rates and to ensurethat utilities are covering all
those costs that I justmentioned of pumping, treating,
storing, and delivering water.But in Illinois, we do not
regulate our water utilities.
We do not regulate our publicwater utilities. We do regulate
our private utilities at thestate level. So what this means
is that even though public waterutilities are not regulated in

(11:03):
Illinois at the state level,they are regulated at the local
level by utility governingboards and city councils, and
that's really where the ratesetting happens. Sometimes the
rates are set by the waterutility staff working with the
community finance departments.Sometimes they commission a rate
study to an external consultant,and sometimes they actually look

(11:23):
at the water prices ofneighboring or similar
communities to help them guidewhat they think the price of
water should be, which is aprocess that's called
benchmarking.
I also wanna mention that wetalk about water price, but it
is important to know that thereis no one single price for
water. What water utilities dois set a schedule of prices in a

(11:44):
process called rate setting. Youcan think of an analogy, like,
if when you go to the state fairor an amusement park, you pay a
price for admission just to getinto the event, but then you
also buy tickets to use to to beable to do certain rides like
bumper cars. Right? And this isexactly how water pricing works.
So, typically, there's a fixedcharge per billing period,

(12:06):
whether that's a month,bimonthly, quarterly, and then
you're paying another charge foran additional volume or unit of
water you're consuming. And soI'm gonna talk about economics
again, but in economics, we callthis two part pricing. Right? So
there's actually no one waterprice. We actually in in the
example I just gave, we havethose two water prices, that
fixed price and a volume price,and the majority of water

(12:29):
suppliers in Illinois do do twopart pricing.
The idea to get back to whenwe're talking about cost, the
idea behind full cost pricing isthat that fixed charge is meant
to cover those waterinfrastructure costs. So things
like the treatment plant, thewater tower, the infrastructure,
the pumps and pipes, and so allof those capital costs. That

(12:53):
yeah. And that volume charge isthen meant to cover operation
and maintenance costs, so thingslike the chemicals, the energy,
salaries, so all the all ofthose costs that will vary
depending on the volume of waterthat people are consuming.

Amy Lefringhouse (13:07):
Makes sense. Yeah. Makes sense.

Abigail Garofalo (13:08):
And then if you could clarify for me, when
you're talking about, like,public versus private utilities,
how do I know if I have, like, apublic or a private utility,
like, supplying my water?

Margaret Schneemann (13:19):
So that is such a great question. I think
the issue of public and privateis often misunderstood. Water
itself, of course, is public.Water itself is owned by the
people of Illinois, and thestate of Illinois manages and
protects the waters on on thepeople's behalf. So, of course,
water itself is public, but aswe've been talking, we need

(13:40):
water infrastructure to be ableto access that water.
We cannot just go out I mean,you can obviously, like, have a
private well in your backyardthat you drill, but you, of
course, have to pay the drillingcosts, manage that, treat it
yourself. Right? So when we saypublic and private in the
context of water, we're reallytalking about ownership of that

(14:01):
water infrastructure. Is it apublic entity that that owns
infrastructure, meaning amunicipality? And that's part of
what the municipality does.
Or is it a private waterutility, which is investor
owned? Something like AquaIllinois or Illinois American
Water here in Illinois areprivately owned utilities that

(14:21):
are managed by investors ratherthan by a local unit of
government as a community waterutility would be.

Abigail Garofalo (14:28):
Oh, interesting. I never thought
about how they were regulateddifferently. That's my situation
is half of my community haspublic, and half of my community
is is through Illinois AmericanWater, and, like, that's I was I
was like, what's the difference?It's just what? And so it's
yeah.
That's really helpful tounderstand and to know just as a

(14:48):
consumer, right, of, like, waterwhere does my water come from?

Margaret Schneemann (14:51):
Alright. And so for water pricing, just
to I might be going into thisway too much. I get a lot of
questions about it, though, butprivate water utilities are
regulated by the IllinoisCommerce Commission, which means
they have to file a rate case.The rate case gets reviewed and
approved. You can access all ofthat information online, whereas

(15:12):
a public water utility is notregulated at the state level.
So all of that is happening, asI said, in in board meetings,
city council meetings. One thingthat means for the cost of water
is that private water utilitiesare then able to put a a return
to investment into their waterrates, which is you could think

(15:33):
of it as like a profit marginbecause why why would you
purchase infrastructure? Right?If they're investing in
infrastructure, and so they'reentitled to a return on
investment for doing so. And soone of the things that often
comes up with water pricingdifferentials between public and
private utilities is thatallowed return on investment.

(15:56):
So a community would not getthat. And so when we think about
why do we have the aginginfrastructure issue, right, we
do see that for a lot of thewater infrastructure in terms of
detecting and fixing leaks hasbeen deferred, and that means
that we do have a higher chanceof water leaks and things like

(16:16):
that as well of, of course,going back to the lead service
line replacement. Right? A lotof those pipes having been put
in and not updated decades anddecades ago. So there has been a
deferred infrastructureinvestment for our water
infrastructure, which is thebill for that is really coming
due for a lot of water utilitiesnow.
And the question of how are wegoing to pay for that is really

(16:39):
out there. The money has to comefrom somewhere. Right? We did
recently have one of the largestinvestments in water
infrastructure come from thefederal government, but that is
typically not the case. The vastmajority of revenue for water
infrastructure does come fromrate payers at the local level.

(17:00):
So when we price water at a ratethat doesn't provide sufficient
revenue for infrastructureupkeep, we do see the
infrastructure deteriorating andthen a larger cost down the road
when we start to see issues withthat aging infrastructure.

Abigail Garofalo (17:16):
And that makes me think too. I was thinking
about how, well, you don'treally move to a community and
say, well, I'm moving herebecause the water price is the
water price I want it to beversus I'm gonna move because
the water price is not what Iwant it to be. That's typically
not what you hear from people.So this like you were
mentioning, it's not a typicaleconomic, like, supply and
demand scenario. Right?

(17:37):
It's got that what was that termyou used? Elastic demand?
Inelastic. Inelastic. Theopposite of what I said.

Amy Lefringhouse (17:43):
Basically, you have to buy it whatever the
price. Right? I mean, like youhave to have that water to
survive, and you have to haveit. So we wanna make sure that
the prices are fair so thateveryone has access to water. Is
that accurate, Margaret, to anextent?

Margaret Schneemann (18:04):
Yeah. Yeah. There's a couple of things in
there. So so one one thing Iheard was, like, you wouldn't
typically think about waterprice when you're thinking about
where to locate, and I do thinkthe reason for that is because
water is really a huge deal,especially municipal water. I
don't have the figures right infront of me, but if you compared
you know, if you went and boughtbottled water in a store, right,

(18:24):
a gallon of bottled water costswhat? Never I never do those

Abigail Garofalo (18:30):
I don't either. Like, I got this. I got
the Internet at my at myfingertips.

Margaret Schneemann (18:35):
Yeah. See, I this is why I I I always drink
tap water, so I don't know theprice of bottled water. A gallon
of bottled water might cost you$2-3.

Amy Lefringhouse (18:44):
I wanna say $2. That's my guess. What is it,
Abigail?

Abigail Garofalo (18:46):
It's it's like between 3 and a little over over
a dollar, like, depending onwhere you buy it from. So it's
like 1.50 to, like, $3.

Margaret Schneemann (18:56):
Okay. So let's just say, like, $2 for a
gallon of water. Now a gallon ofwater out of your tap is gonna
cost you how much? So one of thethings I do is I maintain a
database of water rates. I don'tknow offhand the price of a
gallon, but typically, like,we're we charge for a thousand

(19:17):
gallons.
I think the average for athousand gallons might be
something like $5, so dividefive by a thousand. Okay. So
rounding up. Okay. So it's ahalf a cent per gallon.
So so water is such a greatdeal, and this is I I do also
wanna mention that the water youbuy in the store is not required
to meet EPA drinking waterstandards Right. Whereas the

(19:39):
water coming from your tap is.So for half a cent, you could
have a gallon of water thatmeets that you know is meeting
standards. So that isincredible. Right?
I mean, this really speaks towhat a great job we do do with
water supply. However, the priceof water has been escalating

(19:59):
faster faster than inflation andconsumer incomes. So we know
from our water affordabilitywork that we've done where we've
looked at those rates that itmay not you know, we have one
thing, which is what is thelevel of water prices, but then
we have how much are theygrowing. So they are growing

(20:20):
rapidly and more rapid thaninflation, and that does cause
this concern with wateraffordability and then water
burden or people's ability topay water bills. Now why is
that?
Right? Why is water increasingat such a fast rate? Because of
this issue we've been talkingabout with the aging
infrastructure. So all thedeferred maintenance is the bill
for that's coming due. We've,again, seen legislation with

(20:43):
with needing to replace the leadservice lines.
And then also, our water qualityhas been degrading. Right? And
so as our water quality getsmore and more degraded, we
still, we have more and moreregulation of emerging
contaminants, and that's morewater treatment that we have to

(21:04):
do, and that's more expensive.

Abigail Garofalo (21:06):
And when you say quality, you're talking
about, like, the sourcing.Right? Like, the water that
we're bringing in initially,that's degrading, and so it's
causing more treatments to haveto occur in order to actually
get it to the consumer

Margaret Schneemann (21:18):
at a certain level. Correct. And it's
a little bit of a squirrel hole,but, you know, you could talk
you could talk about, you know,why is is water quality falling.
So, you know, we have reallythree sources of basic sources
of water in Illinois. Right?
We have groundwater, and we candivide that into deep and
shallow. And then we havesurface water. We have rivers
and lakes. Right? So we knowmany areas of the state are

(21:41):
groundwater is being overpumped, which means the water
levels in the aquifers arefalling.
As that happens, the waterstarts experiencing water
quality issues that could bemore salinity, You could start
getting arsenic and othercontaminants in there, and then
you may need to do, you know,all kinds of additional

(22:02):
treatment that you didn't haveto do when the aquifer had more
water in it. We then see if thatwater just becomes prohibitive
or you you just can't get thewell deep enough, which is a
situation we're seeing in WillCounty and Joliet where wells
were actually starting to godry. They made a decision to
switch water sources, and then,of course, you have to build out

(22:24):
the infrastructure to do that.Right? And so that is millions
of dollars to switch watersources.
And if you're going fromgroundwater or surface water
source, of course, surface watercan be more prone to pollutants,
things like from stormwaterrunoff, certainly shallow
groundwater aquifer. We'rehaving huge issues with
chlorides from icing is a is abig issue we see. And then as I

(22:49):
mentioned with the PFAS, seeinghigher levels with of that with
surface water. So yeah. So so wehave a whole bunch of things
basically driving up the cost ofwater, and we're gonna see that
coming through in the price ofwater pricing.

Abigail Garofalo (23:05):
And what are some ways that we are kind of
helping, I guess, like, diffusethose costs to or are there ways
that we can, like, make it alittle more, like, fair water
pricing, or is there is it justkind of, like, it's the
consumers, unfortunately, like,gonna have to bear the brunt of
it? Is that just kinda wherewe're at? Like, what's what are
we looking at here, I guess?

Margaret Schneemann (23:24):
Yeah. So, actually, there's been, in the
past few years, as water priceshave been escalating, a lot of
discussion about what the priceof water should be, what does
fairness mean, what doesequitable mean, what does
affordable mean. And so, really,the biggest challenge I see with
this is actually getting on thesame page with what we mean by

(23:48):
fair and affordable. Right? Howare we actually defining that,
and what does that mean?
And then the second biggestchallenge is really how do we
operationalize that definitionin our water rate setting
practices and policy? Sothinking about fairness, one of
the things that I've noticed is,like, everyone really has a
different idea of what fairmeans. Right? In the water

(24:10):
industry, the concept offairness relates to a very
tangible thing in water ratesetting which is called
equitable water rate setting.And what the water industry
considers equitable water ratesetting to be is that everyone
pays an amount for their waterthat represents the cost that
they impose on the water systemto actually provide that water.

(24:32):
So as we're talking about, ifyou use more water, you'll pay
more because it does take energyto pump that water, the
additional chemicals to treatthat water. Likewise, if you
require more water pressure orgreater readiness to serve in
terms of, like, percent capacitythat you're using to pump water
from the system, an examplewould be a car wash. Right? So a
car wash needs more pressure andmaybe two or three times the

(24:54):
size of pipe that a residentmight need, you pay more. Right?
Because that infrastructure isgoing to be more expensive.
Another example I often use issuppose you have a community.
They're building a huge newsubdivision outside of town that
has a new school and maybe otheramenities, and you need to lay
new water pipes. Do you wantgrandma who's been living in

(25:16):
town in the same house for fortyyears on social security to pay
for that infrastructure? Right?
That doesn't seem fair, does it?But maybe you do. Right? Maybe
you do want Grandmountown to payfor that because maybe the
community's priority is economicdevelopment, and you've agreed
to waive the fees for thedeveloper and the new residents
for the water infrastructurebecause you wanna attract new

(25:37):
residents, you want economicgrowth, you want more tax
dollars, and maybe all that willhelp grandma in town avoid a
property tax increase. Right?
Because she won't have to pay asmuch property tax. So we could
talk about a lot of differentscenarios, but it really starts
to get kinda complicated interms of what we think fair is.
On the other end of thespectrum, because water is a

(26:00):
necessity, we need it to live.Water affordability advocates
argue that water bills shouldreally not unduly burden people.
And what we mean by that is thatthe cost of water should not be
so high as to cause you to makea choice or a trade off between
paying your water bill andpurchasing other necessities
like medicine, paying your rent,buying food.

(26:23):
Some even go so far as to arguethat water should be free
because it's a necessity andneeded for life. And we do
actually have one community inIllinois where water is free to
residents. So as I mentioned,one of the data products I do is
a database of water rates, and Ialways always get calls when I
provide that data to people andemails saying, oh my gosh,

(26:44):
Margaret, you messed up thedata. There's something that's
obviously wrong here because theprice is zero. And they have to
explain, no, no, that's not amistake.
The price of water in thiscommunity for residents actually
is zero. Well, how can that bepossible? Right? How how is it
possible they can give water forfree? Well, turns out that this
community has a very, very largeindustrial customer and there's

(27:08):
very few residents, and sothey're able to fully cover the
cost of the water utility fromthe revenue they receive from
the industry.
Well, obviously, this is areally unique case. Right? Not
every community in Illinoislooks like that. Every community
in Illinois is different interms of their water customer
profile. Right?
How many residents or what kindof industries they have. Very

(27:29):
different in terms of land use,socioeconomics, the age of their
infrastructure. Some communitieshave newer infrastructure. Some
have older. We're just talkingabout water source.
Right? So some might have wellsthat are much deeper and so on.
It goes on and on. So all ofthese differences that we see
across communities are reallyrelevant to when we talk about
what's fair. And what might seemfair to one community Right.

(27:53):
May not seem fair fair toanother. So, anyway, yeah, all
of that is is to say, really, Ithink the biggest challenge in
implementing fair water pricingis really getting on the same
page with what does fair meanand then taking that differ that
definition of fair and beingable to operationalize it in
your rate setting and policy.

Amy Lefringhouse (28:13):
Yeah. And, gosh, every community is so
different. That gave me a, like,I got a little stressed out
because community leaders reallyneed to pay attention to these
things and they themselves haveto take a lot of information
about their community'spriorities and, you know, the
water information that you'resupplying and making those

(28:34):
decisions, it sounds verychallenging.

Margaret Schneemann (28:38):
It is. It it can be very confusing. And I
mentioned benchmarking earlier,so there is a perception there
can be a perception that a wellwater price should be the same.
Right? Water is water, and soevery utility should have the
same rate.
And in fact, recently, we justcompleted a water rate study for
the state of Illinois that wasauthorized by house bill. And

(29:00):
and under that that and part ofthe reason that that study was
authorized was because peoplewere noticing the huge amount of
variation in water rates acrossthe state of Illinois. And so
this study, which was led by theGovernment Finance Research
Center at the University ofIllinois, and I was a technical

(29:21):
adviser to that study, reallydove into all those differences
we're talking about in terms ofwhat are those factors
influencing water prices. Butyeah. So so as I say, because
every community is so different,there really can be no one water
price that's gonna make sensefor every community.

(29:42):
Another thing is every communityhas its own objectives. I
mentioned economic developmentobjectives. Right? We're really
asking a lot of our water rates.The first thing we would like
water rates to do is bring inenough revenue to cover the cost
of the system.
Right? But what are costs?Right? So if I ask you how much
does it cost you how much doesyour car cost or how much does

(30:05):
it cost you to run your car? Youmight say, oh, yeah.
I bought that. That car's youknow, my car's worth $10,000.
It's a old Toyota Camry. Ibought it years ago. It's a
2015.
It's not worth that much. Right?But really, like, what is the
cost of that car? Is it what youpaid for it back in 2015? Is it

(30:25):
what you would pay for it today?
Are you consideringdepreciation? And then have you
also thought about the cost torun that car? Right? Is the cost
to run that car your carpayment? Is it your car payment
plus insurance?
Is it your car payment plusinsurance plus doing maintenance
such as oil changes, putting thegas in the car to make it run?
So, really, we have a situationwhere all of these costs really,

(30:49):
like, may not be consistentlybeing considered by communities.
So in terms of deferredmaintenance, you think about not
doing an oil change, right, onyour car for ten years. Right?
And so that's that's really theanalogy to think about.
If if communities have low waterprices, that may be due to them
deferring needed maintenance andthings of that nature. But

(31:12):
because water prices are votedon in city councils, there's a
political aspect to water rates.So if you you know, no mayor
wants to be the mayor thatdidn't get reelected because
they they raised water prices.Right? So we do have this
political aspect to water ratesetting that can send an

(31:33):
incentive for communities tokeep water rates low and not
completely cover costs.

Amy Lefringhouse (31:39):
What are you seeing in the future as far as,
you know, evolving water prices,but also maybe new innovations
or technologies when it comes towater pricing.

Margaret Schneemann (31:51):
Sure. So I'm just an economist, so I'll
stick to that part. Could talk alittle bit about

Abigail Garofalo: You aren't a fortune teller? (31:58):
undefined

Amy Lefringhouse (32:00):
Can you tell the future?

Margaret Schneemann (32:02):
Economists seem to have a really bad track
record with that. But I will goout on a limb and say, I think
one thing I've seen that is I'mvery hopeful about and I expect
to keep seeing is that waterindustry people and water
affordability advocates arereally starting to get on the
same page with this issue andstarting to craft solutions

(32:23):
together in terms ofunderstanding in terms of, for
example, water affordabilityadvocates understanding all
these costs and all thechallenges that the water
industry is facing, but also thewater industry understanding the
need to not just set rates thatcover costs, but also to provide

(32:43):
water access to people andensuring that nobody is water
burdened. And so I do think thistrend of the water industry and
water affordability advocatescontinuing to work together and
get on the same page will willcontinue. In terms of
innovation, I'd be curious tohear what an engineer has to
say, but Mhmm. One of the thingsI'm kind of excited about that I

(33:08):
think I've seen is that meteringtechnology is really evolving
very quickly.
You could think about watermeters as the cash registers of
the water utility. Right? And sowhen the registers aren't
ringing up properly, there'sgonna be inefficiency. Another
interesting thing with the waterindustry is with water billing.
Imagine fernology that you onlyfind out how many groceries are

(33:30):
in your cart after the cashierrings you up and tells you you
have to pay, and you can't putany groceries back.
You have to pay for it. Right?

Amy Lefringhouse (33:38):
Do I have enough money to cover it? Right?
You're like, oh, no.

Margaret Schneemann (33:42):
Exactly. But you can't put them back.
Can't put them back. Yeah. Whenyou're at the grocery store, you
could put something back, butyou can't put the water back
because you've already used it.
And so most to go back tometering, most water customers
really only have a rough idea.You know, if there is a leak or
something, they may not find outuntil they get the bill. So when

(34:03):
there's e infrequent billing,infrequent meter reading, This
can lead to a lot of confusionand surprise when you're getting
that water bill. So, yeah, Ithink the advances in metering
technology can really help closethat gap in time between when
the water's being used and whenyou're getting that bill, and
that'll really help people beable to find and fix leaks and

(34:24):
also improve that incentivemessage it should be coming from
water prices so that they couldcut back earlier rather than
later.

Amy Lefringhouse (34:32):
It was really interesting just to hear how
complex it is when we're, youknow, the ones that just receive
a a bill in the mail. So kudosto you for doing all the hard
work behind the scenes for us tohave Water at our taps.

Abigail Garofalo (34:50):
I feel like, Margaret, you really like
spreadsheets. I'm just gonnathrow it out there. Say it out
to the world. Say you really say

Margaret Schneemann (34:58):
I do wanna say I don't only do data
collection, I also do technicalassistance to communities to
help them address this issue.Mhmm. And so we could definitely
take a look at water rates andwork with the community to tweak
that tweak the rate to have moreaffordable rates. So, for
example, they could offer anessential amount of water at a

(35:20):
lower price or even provide anessential amount of water for
free.
The community could also usecensus data incomes and take a
look at people's ability to payand then tailor the water bills
accordingly. And then we also dowork with communities to pair
affordable rates with otherpolicies such as waiving the fee

(35:41):
to turn water back on if it'sbeen turned off due to
nonpayment, even having amoratorium on water shutoffs
altogether. They can make surethat customers are aware of
assistance programs such as theIllinois Low Income Household
Water Assistance Program orLIHWAP, or they could even
create their own localassistance program to supplement
what's available at the statelevel. So, yeah, so we do also

(36:04):
work with communities to explorenot only how they could tweak
the rate, but also how theycould pair that with other
policy solutions to make surethat water in the community
remains affordable.

Amy Lefringhouse (36:16):
Sure. That's that's great to know, Margaret,
because some of our listenersmight be in positions where, you
know, they may even serve on oncity councils or work for the
municipality or then or evenjust just residents can can talk
to their council members oradvocate for that, you know, in
their communities. And and toknow that service is available

(36:38):
through extension is yeah. It'sreally it's really great. We
thank you, Margaret, for beinghere with us and and shining
this light on on something thatwe don't think about every day.
I was I actually really thoughtthat was really interesting to
learn about. And I'm just I feellike every single podcast at the
end, I'm always like, oh mygosh. I could learn more about

(37:01):
that after I get off here. Butwe thank you for being here,
Margaret.

Margaret Schneemann (37:04):
Thank you. Thank you so much for having me.
It's been fun.

Amy Lefringhouse (37:07):
Well, we're gonna wrap up like we do at in
each episode with our everydayobservation where we highlight
the mundane and normal of ourenvironment that is actually
really interesting. So, Abigail,what do you've got? What kind of
everyday observation do youwanna share with us today?

Abigail Garofalo (37:23):
Yeah. So I took a little walk before
recording this podcast becauseit is 52 degrees outside. Just
for everyone, all of ourlisteners reference, it is,
like, January 30 when we'rerecording today, so 52 degrees.
The January is a little odd, andso I was like, I have to get
outside, and oh, by the way, Ineed an everyday observation. So

(37:46):
I'm walking I'm walking aroundmy neighborhood, and it was like
I live in a fairly urbansetting, and so I was hearing
cars and lots of things, andthen I birds in the distance,
but not really close, and thenI'm walking, and I hear just
massive amounts of twitterpaiting, just bird bird bird
bird bird bird bird bird bird
And I was like, what? Like, thatis so weird. And so I was

(38:08):
walking, I just kept thinking,wonder why, like, what about
that spot made it, like, reallyattractive to birds. Are there
other spots that I can find?Things like that.
And by the end of my walk, Ifigured out it was like
hedgerows, you know, like peoplehave at the end of their street
or at the end right right by thesidewalk that's like just and
probably invasive, previouslyplanted thirty, forty years ago

(38:30):
hedge rows that the birds arejust using as really nice cover,
and they're really activebecause it's warm, and spring's
starting to kick in in theirbrains just a little bit, and so
they were like, this is thesafest place to be because it's
nice in coverage, and I'm surethey were not, you know, like,
you know, birds you'd find outin an open woodland or things

(38:52):
like that. They're very muchurban birds. Sure. But it was
really cool to see thatcorrelation between or I guess
yeah. I guess, like, to seethat, like, when we're near
these hedgerows, that's when Iwas hearing all these Yeah.
Sounds. And so just, yeah, alittle bit of observation around
my neighborhood.

Amy Lefringhouse (39:07):
Awesome. Well, what about you, Margaret? What's
your everyday observation?

Margaret Schneemann (39:11):
Oh my gosh. So mine also has to do with
birds, which is totally funny.So up here in Chicago, it has
been getting warmer in Chicago,but it in earlier in January, it
was really, really cold, and soI was spending a lot of time
just looking out the window, Iguess, at birds. And so one day,
I see a bird and it looks like acardinal, which I love because

(39:35):
they're so pretty, right? So Igo to get a closer look and I'm
like, wait a second, it's soweird, I think there's I'm not
sure if it's a male cardinal ora female cardinal or what's
going on.
So I get my binoculars and look,and this cardinal was half red,
so how you would expect a malecardinal to look, and then half
brown and gray, how you youwould expect a female cardinal

(39:56):
to be, and I had never seenanything like that. At first, I
thought I was losing myeyesight, so I actually took a
picture, and then I Googled it,because I like, what is going
on? I'm so I actually learnedsomething new looking it up. I'm
probably going to get thispronunciation wrong, but this is
a condition called bilateralgynandromorphia, gynandromorph

(40:23):
And a bilateral gynandromorph isan organism that has one side of
its body that's male, and theother side that's female, and
apparently this is rare, but notit happens with cardinals, I
guess.
Wow. Yeah. Amazing.

Abigail Garofalo (40:41):
That was so special. Isn't that this
special?

Margaret Schneemann (40:44):
Yeah, I was I had never seen anything like
that before. Thought that was sointeresting. And then another
interesting thing was that thatthis condition, they believe
it's been increasing infrequency as the weather has
been getting warmer. So they dothink it's connected to changing

(41:04):
weather patterns as well, whichI thought was interesting.

Amy Lefringhouse (41:24):
Any day observation. That is true.
Happen anytime.

Margaret Schneemann (41:28):
But you can look at your bird feeder every
day to yes.

Amy Lefringhouse (41:34):
That's pretty amazing. Well, I'm going to
round it out because mine'sabout birds as well. So it's you
know, the time of year wheretrees are dormant. It's like
kind of drab outside, so youhave to find something cool to
look for right in nature, soyou're like, what can we find?

(41:54):
And I know we've talked aboutthis in other everyday
observations, but, you know nestwatching right now or nest
finding, nest searching rightnow is like amazing, and you can
see all the different nests,know, kind of like the
silhouettes of the nests up inthe trees.
In fact, yesterday, I think, ortwo days ago, we were looking at
eagles because I live on theMississippi River, and there

(42:17):
there's a lots of eagles overhere. And I mean, we saw at
least four or five eagle nests.They're they're just they're
everywhere around here. But Iwent on the Christmas bird count
with one of my fellownaturalists, and we were taking
a ride up this old back road,gravel road along a stream, and

(42:41):
we look up and we saw an oriolepouch nest hanging kind of over
top. I mean, obviously it's notin use right now because they're
not around here, but it washanging there over top of a of
the road, which was right near astream.
And my friend said, oh, I thinkthat they lots of times, you

(43:01):
know, weave their nests or buildtheir nests near running water,
and lots of times they're kindof hanging out over running
water. And then we saw two morethe rest of the day. We saw
three oriole nests that day justhanging out over the stream. So
that was that was really cool.It's just a neat, you know,
different, I guess, shape, Iguess, if you will, or different

(43:24):
type of nest where they hangdown in a pouch and and lay eggs
in in that hanging pouch nest,so that's kinda cool.

Abigail Garofalo (43:35):
So it's also so special. Yeah. That's so
special, Amy. Look. Yeah.

Amy Lefringhouse (43:41):
Is cool. But again, if you're not outside and
looking around and beingobservant and kind of like
looking for those nests andthings, you might miss those
types of nests or the cardinalsthat Margaret seeing or even the
birds, you know, flocking to thehedges. So anyway.

Margaret Schneemann (43:59):
That is so true. All I got sorry. All I got
was last summer was Robin'snest, but they did do two
batches of Oh. Fledglings. Butevery day, yeah, it was pretty
exciting to go out every day andand watch the birds, like, watch
them sitting there, watch themhatch, watch them grow, and then
one day they were gone.

Amy Lefringhouse (44:20):
I know. I love it. I love it. Well, thank you
again, Margaret, for being here.This has been another episode on
the Everyday EnvironmentPodcast.
Check us out next week where wetalk with Peggy Anesi. She will
talk to us about water educationand community outreach.

Abigail Garofalo (44:39):
This podcast is a University of Illinois
Extension production, hosted andedited by Abigail Garofalo, Erin
Garrett, and Amy Lefringhouse.
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