Keep Davis water affordable under public operation

By From page A11 | February 24, 2013

By Nancy and Don Price

Ken Wagstaff, former Davis mayor, claimed in his op-ed piece last Sunday that opponents of Measure I are guilty of myth-making when we say that the “Davis/Woodland municipal system will be ‘privatized’ because it will hire an operator.”

Unfortunately, it would seem that Wagstaff and supporters of Measure I, including a clutch of elected officials, are either responsible for creating their own myths or don’t fully understand what privatization means.

Worldwide, “privatization” is understood to include outright ownership, long-term lease or operation and management by a private, for-profit corporation under contract to a municipal government to provide water services over a determined number of years. This is precisely what the Woodland-Davis Clean Water Agency will do when the final contract is signed to design, build and operate the Woodland-Davis project.

In other words, Measure I will allow a private operator to sell water to Davis residents and earn a profit in the process, effectively turning a public good into a commodity subject to market forces.

Across this country and worldwide, this model of privatization, in particular of critical resources such as water, is completely discredited and resisted. Those who have experienced privatization have quickly become fed up with higher water rates used to pay corporate profits to investors and shareholders, and with reduced transparency, local democratic oversight and accountability.

The California Public Utilities Commission, which regulates privately owned utilities and services and rules on rate increases, generally allows private providers at least an 8 to 10 percent profit, so we can be sure that the contracted private operator of this project will earn at least this, though you won’t see it disclosed in financial documents or spreadsheets.

Moreover, handing over control to a private corporation puts us at great risk of further price hikes beyond what is built into the current proposed rate increase, which covers only five years. In fact, at any time, the corporate operator can make the case for a rate increase because “their” operating costs have gone up. This siphoning off of our and the city’s money to pay off corporate profits means less money for the common good such as parks, greenbelts, road maintenance, community facilities and more.

It should not be lost on Davis voters that throughout the world, municipalities are fighting to recover public control over privatized water utilities. Even Paris, France — home of some of the world’s largest private water utilities — recently “liberated” its water services from private operation to establish public, democratic water management. The results in the first year: The city saved $46 million and rates fell by 8 percent.

And what about oversight? As I understand it, the length of private operation of the project, whether for 15 or 20 years, is still undetermined. Yet, because there are only four votes on the Joint Powers Authority — two from Davis and Woodland each, either party could hold the other hostage on any matter by a single vote. And every year that we contract out to a private operator is a year squandered in terms of building public capacity and expertise — making the possibility of bringing the water back under public control more difficult.

Why should Davis endorse privatization when the trend is toward re-municipalization to keep water services public and affordable? Please join me in voting no on Measure I. We can meet our water needs for the next years without the Woodland-Davis project. This will give us time to craft a more affordable, cost-effective, public and environmentally sustainable alternative to meet Davis’ water needs.

— Nancy and Don Price are members of Yolo Ratepayers for Affordable Public Utility Services, and Don, a retired professor of Chinese history, taught a course on Chinese environmental history.

Special to The Enterprise

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