Source: Institute for Wisconsin's Future
In Milwaukee, a coalition of environmental, community, labor and faith organizations succeeded in convincing the city council to indefinitely shelve plans to privatize the water system and go back to the drawing boards for solutions to the city's budget crisis. The coalition, Keep Public Our Water (KPOW), protested that evidence from other privatized water systems indicated substantial risks of poor water quality, rate increases and lost jobs.
In response to serious budget shortfalls in Milwaukee, the City Comptroller in late 2008 proposed privatizing the city-owned Milwaukee Water Works system through a 99-year lease of all the water operations, a form of public-private partnership. The plan was that a one-time payment for the lease would be set aside in an endowment to generate about $30 million annually to help fund city operations.
The city couldn't just cover its budget needs by raising rates itself, because water revenue must be used for water purposes only. The Comptroller understood that water rates usually rise after privatization, and anticipated that the $30 million a year in lease revenue would substitute for additional property taxes, fees, or state or federal revenue.
The Milwaukee Common Council authorized a request for proposals to find an "Advisor Team" to oversee and guide the bidding and contracting process, and received bids from 17 firms. But in May 2009, in response to a public outcry, the Council put the process on hold to better explore revenue options without privatizing.
Strong opposition to the plan arose partly because of the stellar record of the city's public water system and the disastrous record of its privatized sewer system. Milwaukee Water Works, which also supplies water to 15 neighboring communities, has been endorsed by the US Environmental Protection Agency for producing drinking water that is among the highest quality in the nation. On the other hand, billions of gallons of raw and partially treated sewage have poured into Lake Michigan and local streams since the system was turned over to two successive French corporations, United Water (owned by Suez) in 1998 and Veolia in 2008.
Following protests by the Keep Public Our Water coalition in June 2009, the Council abandoned the privatization plan.
Advocates for the public system now want to make sure the privatization idea is not resurrected. In September 2009, a resolution was introduced to the Milwaukee Common Council that would ensure the city continues to own and operate the Water Works. The resolution awaits a vote in 2010. In addition, the Wisconsin Legislature is considering two bills that would either forbid or require legislative approval for any sale or lease of the city's water to private business interests.
Data showed higher water rates in Wisconsin for people served by private utilities rather than public systems. The lease revenue received by the city would be paid back over many years by residents through increased rates paid to the company.
When private utilities cut corners to increase profits, it can lead to shoddy work and deferred maintenance. Milwaukee's recent experience with sewage spills under French multinational corporation Veolia highlighted this risk.
With a private company controlling the city's water for 99 years, city residents would lose control of decision-making affecting that essential resource. While residents can control public utility decisions by voting officials in and out of office, private water corporations are accountable only to their stockholders.
The hiring of advisors to oversee the contracting process also raised conflict of interest issues. Cities usually partly pay such advisors with "success" fees upon completion of a contract, creating an incentive to push for privatization.
The Keep Public Our Water coalition knocked on doors, convinced council members to introduce the resolution, and brought 200 people to protest at City Hall on June 15, 2009, the day the Council voted down privatization. KPOW continues to meet regularly as a watchdog, and is working to pass the city resolution and the state legislation protecting against future privatization.
Coordinating committee members of KPOW (in alphabetical order):
AFSCME Council 48
Campaign Against Violence
Food & Water Watch
Institute for Wisconsin's Future
Making Milwaukee Green Coalition
Milwaukee Inner City Congregations Allied for Hope
Milwaukee Riverkeeper
Riverside Park Neighborhood Assn.
Sierra Club
Water Works Local #952 (AFSCME)
