Communities reject private control of local water resources

On Feb. 19, residents of Rosario, Vusario and Orcas Highlands communities on Orcas Island in Washington State voted to annex their private water utility to the publicly owned and operated Eastsound Sewer and Water District. They are among the growing ranks of small communities this year looking to break ties to their private water provider and instead opt for public ownership of their water services. "In contrast to a private utility, the first priority of a public utility is serving its customers, not shareholders," said Rollie Sauer, Board Member for the Orcas Highlands Homeowners Association. "Local ownership of our water utility will result in better stewardship." In September of last year, the company Washington Water Services acquired Rosario Utilities and secured a 60 percent increase in water rates. Orcas Highlands and other affected residents felt they did not have adequate input in the decision and began working through their homeowners associations to transfer the utility to public ownership. "Water privatization hurts customers in the pocketbook and moves decision-making about water resources from the town hall to the board room," said Wenonah Hauter, executive director of the national consumer advocacy group Food & Water Watch. "Water utilities large and small offer better services and operate more responsibly when they are publicly and locally controlled." A Food & Water Watch study, entitled "Economic Failures of Private Water Systems," found that privately owned water utilities charge customers significantly higher water rates than their publicly owned counterparts: anywhere from 13 percent to almost 50 percent more. After the failure of several showcase water privatization plans in large cities like Atlanta and New Orleans during the last decade, some water companies have turned to purchasing smaller systems. However, even small communities are choosing to part ways with private water companies that have failed to deliver on promises. In March, the town of Cave Creek, Arizona will take over operation of its water utility from Arizona American Water, much like it took over operation of the Desert Hills water utility in January of this year. "We determined that Cave Creek could operate and upkeep the water utilities better," said Usama Abujbarah, Cave Creek Town Manager. "Public ownership our water utility will mean not only local control of our water resources, it will also better serve the public health, safety and welfare of the community." On Feb. 12, the city of Fort Wayne, Indiana, began transferring 9,000 customers of Aqua Indiana-a subsidiary of Aqua America-to public water in the company's poorest performing area of the city. In recent years, Fort Wayne residents have received excellent service from the city's public utility, while complaints in northern parts of the city serviced by Aqua Indiana were 250 percent greater than nearby service areas. In 2002, Fort Wayne began using eminent domain to purchase the utility from Aqua Indiana. "These neighborhoods have been asking for better water at a lower cost," said Fort Wayne Mayor Tom Henry. "Several neighborhoods petitioned for city water. Fort Wayne's water system has the capacity to easily serve them." Other cities like Tiffin, Ohio and Scottsdale, Arizona are also exploring the feasibility of purchasing their water utilities from private companies in the future. "Communities that have experimented with privatization have not found that it solves their water woes," said Hauter. "The future of American water lies not in further privatization but in a renewed commitment to safe and affordable public water. This is why Congress needs to create clean water trust fund to ensure a steady, reliable source of funding for public utilities for years to come."