Utilitarianism

A moral philosophy that advocates making choices based on the maximization of utility for the majority of people. What is Utility? Happiness, pleasure, it's a measure of an individuals satisfaction with life. You don't have utility, someone or something gives you or increases your utility.
A look at this in terms of policy analysis.
Say the mayor of a small mountain town wants to put a state of the art levy in place to stop a rivers' overflow from damaging buildings on one of the city's streets. This will directly enhance the utility for the shop keepers and homeowners who's dwellings are in the direct vicinity of the river, but how about the rest of the town who lives on top of the mountain? Presumably they are going to have to foot the bill for this new levy in the form of a new tax, this will directly lower their utility. Now a Utilitarian would say that the levy is a "right" policy if the total utility of this town is increased. This is exactly the decision making system economists use when preforming cost benefit analysis. Not too alarming.
Now I'll look at this from a moral angle.
Say there is an Utilitarian individual out there who is trying to decide between two actions. Killing someone and stealing their money, or not killing someone and stealing their money. The individual is sane enough to know that killing someone is wrong and against the law and that most people would decide against it. However, if this individual really enjoys killing people then murder will increase his utility. A true utilitarian would choose to kill the person even though they know it is wrong.
Im going to try to merge these two examples. Suppose you have a city that is located below sea-level and surrounded by water. The probability that flood waters could breech the levy's in place is low but still a probability. Reconstructing the levy's would increase the utility of those who are paid to do the work, and in the event of a catastrophe would increase the utility of all those who's lives and possessions would be saved. However this construction process is very costly. It will reduce the utility of a majority of the citizens in the city even they know that it will one day save lives. What is the mayor to do? Does the Utilitarian mayor take into account the current utility that this policy would generate or does he project what the future utility increase will be and use that to make his decision?

I'm still trying to wrap my head around this idea of Utilitarianism. It's been used to justify socialism, communism, libertarianism, and has been the grounds for a hypothetical height tax debate among economists. It says that we do what is best for the majority, regardless of the implications to the minority. But what happens when the minority is the one with all the power and resources? Can this ever really take place?