Two and a half years ago, the city of Stockton voted to abandon privatization of city water after four years of poor service, contamination, and soaring rates. It’s a textbook case of why public services should never be privatized – investors merely want to generate profits and don’t care about the quality of service, so they’ll cut corners and jack up rates.
One might have thought that this experience would have led the state legislature to stay as far away from water privatization as possible. And you’d be wrong, as the San Francisco Chronicle reported over the weekend:
Private companies could own, operate and profit from reservoirs and other water-storage projects built with billions in taxpayer dollars under a little-noticed provision of the $11.1 billion water bond that was approved by the Legislature and goes before California voters next year.
Lawmakers barely discussed the provision while considering the bond, and water experts who were asked about it by The Chronicle said they knew little about it or why it was a necessary part of the plan to overhaul the state’s water system….
The bond provides for the formation of what are known as joint powers authorities – usually a coalition of public entities that pool resources for projects they probably couldn’t do, or couldn’t afford to do, on their own. The water bond, though, specifically allows for the creation of joint powers authorities that “may include in their membership governmental and nongovernmental partners that are not located within their respective hydrologic regions in financing the surface storage projects.”
This came at the request of the Glenn-Colusa Irrigation District in the Sacramento Valley, where the $3.5 billion Sites Reservoir is going to be built, partly with funding from this bond. Instead of water fees going to pay off the costs of construction and operation, some would go into the pockets of an investor. In short, users would have to pay an investor to take a shower, wash their clothes, or cook their dinner.
As the Chronicle article shows, water privatization tends to benefit a few wealthy individuals (Stewart Resnick) and distorts the usage of water:
In a controversial agreement, the state officials turned control of the bank over to the Kern County Water Agency in 1995 in exchange for water rights to 45,000 acre-feet of water, or enough to meet the annual needs of about 90,000 households. Later that year, the Kern Water Bank Authority formed as a joint powers authority that includes the Kern County Water Agency, four other water districts and one private company, the Westside Mutual Water Co.
Westside now owns 48 percent of the shares of the water bank. The company is owned by Los Angeles billionaire Stewart Resnick and his Paramount Farms company…
Paramount Farms is in the midst of a significant expansion, according to the company. Most Kern County farmers have suffered through years of drought, and the water agency there declared a state of emergency this year due to a lack of water.
Arnold Schwarzenegger sells these kind of private funding deals to the voters as a way to save money – but they’ll spend more for the water fees than they would if we paid for this out of tax revenue.
Privatization of water resources – in any form – is a line that should never be crossed. Some places in California do get their water through private companies, such as we who live on the Monterey Peninsula. It’s a totally unnecessary situation, and should be avoided when possible. This news will only further damage the bond’s already doubtful prospects for passage. Which would be just fine by me given the numerous flaws in the proposal.