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Great Lakes Article:

DEMOCRACY AND WATER: THE PRIVATE FOOT IN THE PUBLIC DOOR
Public Citizen
12/11/2002

From Burkina Faso to Yemen, private water corporations have bullied their way into control of public water utilities through the World Bank's policies.  Loans to so-called "underdeveloped" nations have been tied to requirements that public water systems be turned over to private operators.  Now this kind of "foot in the door" scenario may be played out on the American stage.

Senate Bill 1961, the Water Investment Act of 2002, aims to provide crumbling water systems across the nation with much needed funds for infrastructure improvements, as well as aid for conservation programs and compliance with new arsenic standards.  This crucial bill, however, was implanted with a poisonous provision which would have required water systems to "consider" privatization measures before being eligible for federal funds.  Due to the tireless efforts of Public Citizen's Water for All campaign, this language has been removed.

But a similar bill in the House still contains such requirements, which may be reinstated in the final legislation when the final House and Senate bills are combined.  It is crucial that this language be absent from the final bill - these provisions may not be enough to be a deal-killer on such an important piece of legislation. 

Just what did the Senate bill prescribe?  At issue was Section 103 (j)(1)(b), under "Requirements for Receipt of Funds".  It read: "...a State may provide assistance from the water pollution control revolving fund of the State for a project only if the recipient of the assistance-- 1)has considered-- A) consolidating management functions or ownership with another facility;  B) forming private-public partnerships or other cooperative partnerships..." (emphasis added).  As Water for All's researchers astutely observed, the word "considered" was undefined, and it would be left to the courts to say how far a public utility would have to go to meet this requirement.  Would it simply mean that water officials must put the matter on the agenda for discussion? 
Or would consultant and attorney fees have to be expended to thoroughly explore the issue?

The House bill in question contains equally vague language in Sec 122 (c) (13) (c), in which water providers are required to "analyze the cost effectiveness of alternative management and financing approaches (...including public-private partnerships)."  HR 3930 was introduced in March of this year by John Duncan (R-TN) and Peter DeFazio (D-OR) in the House Water Resources and Environment Subcommittee.  It has since been discharged from the House Transportation and Infrastructure Committee and referred by
the Ways and Means Committee.  Just when it will hit the floor is anyone's guess.

A strong supporter of the privatization provision is Andy Shea,  a representative of the National Council for Public-Private Partnerships, whose website proclaims the wonders of privatization in all aspects of the economy.  In his testimony before the Water Resources and Environment Subcommittee, he said the provision will help "address the funding gap" in the water industry, although he added the caveat that he would like to see that the concept "does not absolutely require a community to pursue a partnership as a condition" of State Revolving Fund assistance.  Opponents of the provision, such as the American Federation of State, County and Municipal Employees (AFSCME) and Public Citizen, say the language does make explicit such a requirement and that it should be removed entirely.*

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 When public water officials sit at a utility board meeting or city council meeting, we are supposed to look at the democratic, financial, and environmental consequences of the decisions before us.  This kind of
legislation assumes that those decisions are purely economic in nature.  Forcing cash-strapped utilities to turn to the private sector for funding may lead to a "deal with the devil" of the sort now experienced by Atlanta, Ga. and Milwaukee, Wis. 

In Atlanta, reports of dirty tap water, dry hydrants and poor customer service led the city to begin an audit of the private company contracted in 1998 to run their system.  In Milwaukee, the private contractor, United Water Services, figured it could save money by temporarily shutting down wastewater pumps, which resulted in 107 million gallons of sewage being discharged into Lake Michigan and surrounding streams.  A for-profit water utility pursues such cost cutting measures for the same reason a lion pursues antelope- it is simply in its nature.  Profits must be maximized, costs must be reduced, and water is simply another commodity for sale.

Members of the Alliance for Democracy understand that water is a human right, not a commodity. Democratic control of our water systems is essential to prevent profiteering and to maintain a healthy environment and community.  We are committed to fighting for democratic control of these institutions, and
we will continue to keep you updated on these issues.

Lisa Melyan
Commissioner,
Tualatin Valley Water District

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Please contact Representative Peter DeFazio and Rep. David Wu (who recently signed on as a co-sponsor of HR 3930) and let them know how you feel about this issue.

Rep. Peter DeFazio                 
2134 Rayburn HOB               
Washington, DC 20515-3704                     
(202) 225-6416                     
or contact his Eugene office at:               
(541) 465-6732                     
or toll-free (800) 944-9603 

Rep. David Wu                              
1023 Longworth HOB          
Washington, DC   20515-3701
(202) 225-0855
Fax (202) 225-9497 
or contact his Portland office at:
620 SW Main, Suite 606
Portland, OR 97205
(503) 326-2901

*AFSCME's statement against this provision can be found at 
afscme.org/action/legfs07.htm. 
Public Citizen's Water for All campaign can be found at 
www.citizen.org/cmep/Water

Sources:
Public Citizen- Water for All
US Water News    www.uswaternews.com
American Water Works Association's MainStream
Office of Representative David Wu
National Council for Public-Private Partnerships
AFSCME

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