I work for a municipal authority and your analysis is 100% correct. Elected officials don't want tovrsise prices because of politics. Water and sewer plants will run on minimal budgets but a lot of things will be "deferred" because it's not in the budget. And then something major goes wrong and the municipality is forced to raise rates substantially or sell. And hint, selling is a more politically palatable move than raising rates--at first. But people will end up paying higher rates because the private company is going to set rates to make the exact same repairs and make a profit.