Clearing the Water The real story behind activist groups’ favorite case studies.
Groups like Food & Water Watch – as well as their national and international allies, like Corporate Accountability International, In the Public Interest and Public Services International Research Unit – regularly distort the private water experience in just a handful of cities to make their ideological case against private water. Over and over again, critics point to these seven cities to argue that private water doesn’t work.
But their favorite “case studies” contain more fiction than fact. Activist groups rely on partial timelines, made-up facts and biased reports to paint a purposefully misleading picture of what happened during private operation – and more importantly, what’s happened since.
In 1999, the Atlanta City Council signed a 20-year, $428 million contract with United Water to operate Atlanta’s water system. However, by 2003, the two parties ended the contract. Water activists claim that the partnership between Atlanta and United resulted in lost jobs, declining water quality, higher rates, backlogged maintenance and unrealized cost savings. In fact, the system had no water quality issues and no public employees lost their jobs. In addition, critic claims about maintenance backlogs and cost savings don’t tell the full story. After moving back under public control, Atlanta’s water system has been plagued with problems, from skyrocketing water rates to faulty meters and erratic billings – information conveniently ignored by water activists. As of 2011, Atlanta had the highest water rates of any major U.S. city, and inconsistent and incorrect billings even led to a class-action lawsuit against the City. Learn more about the true story in Atlanta.
In 2002, American Water asked the California Public Utilities Commission (CPUC) for approval to raise rates in Felton by 57 percent over three years, citing an urgent need for infrastructure repairs. The water rate increase, approved by the state CPUC, spurred some public opposition, and a local grassroots organization formed to push for a government takeover, or condemnation, of the water system. After six years of American Water operations, the system was brought under government control via eminent domain. Activists like Food & Water Watch call Felton a “great victory” and applaud the current operations model, claiming water costs have decreased since condemnation in 2008. In reality, water rates increased a total of 67 percent under government ownership between 2008 and 2016, about three times faster than condemnation proponents promised. And when the San Lorenzo Valley Water District Board proposes additional rate increases, local residents are largely ignored and no longer can rely upon a transparent CPUC rate-setting process to air their concerns. Learn more about the true story in Felton.
In 1998, the Gary Sanitary District (GSD) awarded a 10-year, $95 million contract to United Water to operate the city’s wastewater treatment facility and sewage collection system. In 2008, the contract was extended for five additional years. However, in 2010, the two parties agreed to end the engagement after a series of disputes. Water activists claim that the experience in Gary “underscores how a private water company can prioritize profits over human and environmental health.” But in reality, before United took over operation in 1998, an EPA environmental engineer called the Gary Sanitary District the “most poorly operated sewage facility in the Midwest,” and the EPA considered the system incompliant. Just one year after the public-private partnership began, United and Gary received the U.S. Conference of Mayors’ Outstanding Achievement Award. When the contract was renewed in 2008, the president of the Gary Sanitary District said, “This public-private partnership has served Gary area residents well… We have made tremendous strides working with United Water during the past decade.” Learn more about the true story in Gary.
In 2002, Indianapolis signed a 20-year, $1.5 billion deal with Veolia to manage the city’s water system. However, the two sides agreed to end the deal in 2010. Food & Water Watch (FWW) has claimed the experience in Indianapolis “illustrates why the movement to stop the privatization of water is gaining momentum around the world.” However, critics fail to note that after exiting the Veolia contract, the Indianapolis water system has experienced job cuts, worker benefit cuts, and rate hikes. Double-digit rate increases occurred in 2011, 2012, and 2014, and the system is currently seeking another 20% water rate increase. Learn more about the true story in Indianapolis.
In 1998, United Water entered into a 10-year, $300 million agreement with the Milwaukee Metropolitan Sewerage District (MMSD) to provide wastewater treatment services. Milwaukee officials expected to save an estimated $130 million, or 34 percent of the sewer service cost over the term of the contract. Water activists claim the private operator was at fault for various problems with the city’s system, including sewage overflows and pump shutdowns. In reality, United’s operations in Milwaukee saved residents $144 million in the first nine years of its contract, beating projected savings by a wide margin. In addition, city overseers didn’t blame United for the issues that arose and, in fact, applauded the company’s work. While critics attempt to blame United for every issue, facts from independent sources tell the real story. Learn more about the true story in Milwaukee.
In 2010, city officials in Missoula, Montana, launched an effort to purchase Mountain Water, the privately owned local water system. Following a breakdown in negotiations, the mayor led the city into a government takeover, or condemnation, of the water system using eminent domain laws. After several delays, Missoula was successful in taking over the system in 2016, but it came at a high cost for taxpayers. Advocates originally argued that the system could be purchased for $43 million, yet the final cost surpassed $105 million. The city spent 20 times its legal fee budget for the takeover, amounting to millions of dollars in cost overruns. After convincing the public that a takeover would lower costs, rates immediately increased 6% under government ownership. Learn more about the true story in Missoula.
From 2012 to 2015, the Pittsburgh Water and Sewer Authority (PWSA) maintained a peer consulting arrangement with Veolia, where a small group of Veolia employees worked alongside more than 200 PWSA employees to improve day-to-day operations and share industry best practices. Despite the fact that the water system in Pittsburgh has been owned and operated by the government for decades, activists try to blame Veolia for PWSA’s longstanding problems, including $1 billion in total debt; deferred investment in infrastructure, illustrated by an average water mainline age of over 70 years; longstanding billing and customer service issues; and recurring water mainline breaks leading to millions of dollars in lost water and repair costs. Given all of these issues, it is shocking that critics and activists continue to argue that the status quo of continued public operation is the right path forward for PWSA. Learn more about the true story in Pittsburgh.