April 27, 2007
By Carolyn Toll Oppenheim


Bill Currently Before State Legislature Could Privatize Our Water Services in Cities and Towns Without Any Public Hearings

OUTLINE of threat to democratic process of House Bill 3216 supported by Mass. Municipal Association (MMA) Introduced by State Rep Stephen Kulik of Worthington And Denise Provost of Somerville

HOUSE BILL 3216 now before the Mass Joint committee on State Administrative Oversight could come up before the committee any day and if approved and put before the legislature, could put water services in all our cities and towns privatization on a "fast track" to privatization. The bill calls for no public hearings, no citizen input other than a vote by the city council or town meeting -- requiring no public notice before allowing them to vote in a 20-year multi-million contract to privatize water services.

The bill eliminates requirements for state standards of due process and guidelines in local cities and towns for signing a private contract, allows only one bidder, and requires NO studies or cost comparisons between a city-run operation and a private one.

What is new about this bill is that it creates "boilerplate" fast track legislation that used to have to be crafted by each town separately, as was done in Holyoke in 2004 after a long citizen and mayoral struggle. If citizens got wind of the process there was time to intervene and challenge the anti-democratic process the local municipality was seeking state permission to enact.

This bill, in escalating an already existing methods for the state to exempt municipalities from existing laws requiring competitive bids, eliminates any window of citizen intervention into the process. Since 2000, cities and towns have been permitted by the legislature to write what it termed "special legislation, permitting "one-bid, no competition 20-year contracts" with private water companies for water services. This was being done quietly, under the radar screen, with legislation written by water company consultants working with the cities and towns.

The cities of Taunton, Holyoke and Lynn privatized using this form of special legislation. In Lynn, the "waste, fraud and abuse" was to egregious that the MA Inspector general's investigation produced the report Privatization of Wastewater Facilities in Lynn, MA outlining the corruption inherent in such a non-competitive arrangement.

Citizen struggles against privatization in Lee and Holyoke became chapters in a new book on the water services privatization movement around the country: THIRST: FIGHTING THE CORPORATE THEFT OF OUR WATER, by Alan Snitow and Deborah Kaufman, producers of the PBS film also called Thirst.

As members of Shays 2 were involved in the struggle in Lee, MA and then launched the citizen opposition to privatization in Holyoke, we have a list of objections to this proposed bill based on the experience of citizen activists working to maintain the democratic process in government:

HB 3216 escalates the current "Special legislation" method to a statewide "Fast Track" that preferences the private company and is worse: than the existing "special legislation" because:

• It requires no chance for citizens to debate the underlying premise of this permission for no-bid privatization-it ignores the complete abandonment of municipal obligations to provide such services to their citizens.

• It prevents a municipality from "customizing" its special legislation, by creating a "boilerplate form," so citizens cannot demand insertion of standards or caveats.

• It requires no special public notice, public comment or hearings before a city council or town meeting takes up the issue of invoking this "fast track" state law. A council or town meeting can quietly vote to adopt invoke this new state law which then puts the decisions of privatizing and with whom to contract into the hands of one single person who has no obligations to consult: the "procurement officer" of the municipality.

• It gives no rights for citizens to weigh in on the actual contract signed by the city as all of this power goes to the procurement officer. There is no requirement to make the contract public, call for public notice and public comment.Corpora

• It requires NONE of the accountability, transparency, and due process of the prior state laws on procurement that now exist. This bill exempts the municipality from democracy. Citizens cannot follow the money; there are no mechanisms for oversight or intervention.

• Rates will be set by the needs of the private company for 20-years, usurping the rate-setting function of the city council. Budgets of the company are private.

• No protection against "waste, fraud or abuse," a violation of state law (found by the Inspector General in Lynn)-rather, it is an invitation to corporations to "buy" local politicians for influence with no checks and balances from citizens.

• It protects the private company from any citizen or city demand for innovation and cost-effective methods once the contract is signed over its 20-year period. It takes away any incentive for a company to maintain up-to-date technology so that at the end of the 20 years the city is left with a white elephant and is forced to renew or re-privatize to re-build an obsolete department.

• It allows no customizing of environmental standards and other standards like workforce numbers. While it cleverly stipulates municipal workers must be kept at the same levels of pay and benefits (anticipating union opposition), it does not require the department maintain any workforce level. This is one of the ways private companies notoriously get profits (as research shows)-by cutting back on services as workforce drops by attrition and is not replaced. Holyoke went from a 30-person workforce in its DPW to 17 in less than two years. (Mark Lubold, former city councilor who ran for mayor opposing the the contract and is widely quoted in the Holyoke chapter in THIRST.

• It has no requirement for independent engineers to oversee these contracts (as advised by the professional organizations AMSA and AMWA) as the press has noted is the flaw in most no-bid public works projects, where accountability disappears (like the Big Dig).

• It does not require the private contractor to do impact studies of their plan on existing city environmental and development plans.

Our research has shown that the pressure for this "fast track" legislation is coming from lobbyists for the water services industry. Most of the municipalities that privatize have been under orders by Environmental Agencies (state or federal) to upgrade aging systems -with no state or federal funds available to do the work. Then private companies offering to solve the "problem" more quickly and cheaply approach them. Public agency pressure to comply with environmental standards always is more rigorous when a private company is standing in the wings offering to sweep in and help the city or town out.

It is no accident that the Massachusetts Municipal Association is supporting this bill-calling for fast track privatization of wastewater treatment facilities only-with a cover letter that anticipates privatization of water plants as well. The MMA membership includes a large number of our commonwealth's mayors, and it is the mayors who have been educated about the "benefits" of water services privatization since the l990's at their meetings of the US Conference of Mayors. [SEE ATTACHED LETTER TO THE MA INSPECTOR GENERAL FROM THE HOLYOKE CITIZENS FOR OPEN GOVERNMENT ON THIS ISSUE.]

"Currently 85% of public water in the US is run by municipalities," said Deborah Kaufman, co-author of Thirst. "The chief lobbyist for the American Waterworks Association, the national association of water companies, told us their goal is to have 85% of those cities and towns water systems in private hands in a decade."

Land developers support -- and lobby for -- water privatization, according to Snitow ∓ Kaufman. It makes jobs go faster. One major developer told them real estate developers need to talk to other "CEO's" and not government bureaucrats in doing big projects. "Kings like to talk to other Kings," Snitow said the developer explained.

Privatization of our water services eliminates public oversight, accountability and transparency of finances and services-leads to skyrocketing rates, the risk of our water being taken and sold for profit, threatening our own communities' growth and develop our own communities' growth and develop. There is a new citizens-revolt movement taking place under the radar of the national media in towns and cities across the United States against the corporate takeover of water, a necessity of life that touches everyone at home. But water is rapidly being transformed from a public trust into a product to be bought and sold to the highest bidder. It's becoming the oil of the 21st century as multinationals learn they can profit from this natural resource. Bottled water companies are spending millions of dollars advertising water in plastic as pure and clean-falsely suggesting that tap water is otherwise. With no advertising budget, how can our communities' great public water systems fight back to defend themselves... even if our water costs 1,000 times less and is more rigorously tested? While multinational water companies tout their charitable donations, there is little to publicize their systematic lobbying to slash federal funding for clean public water systems. Water is the only public resource without a federal trust fund to help municipalities keep it cleans, safe and affordable.

Out of sight of most Americans, global corporations are rapidly buying up (all over the world) local water sources in small towns out of the eye of the media - lakes, streams, and springs. By taking control of public water services (including sewer, waste-water and water filtration plants) these corporations get access to municipal water supplies. While major water companies publicize gifts to environmental organizations, there is little publicity of the companies' exploitation of local aquifers to "mine" water in the public domain over the objection of citizens, drastically raising local water and sewer prices and limiting future development of communities with drained aquifers.

As society faces the ticking clock of global warming, water scarcity - already a crisis in much of the world - is about to become a reality in the US. How will citizens be able to find out what is happening to their water when private companies control the information? How will government be able to require equitable and environmentally responsible delivery of water if private companies increasingly control decision-making through lobbying and campaign contributions?

In Massachusetts, the privatization of water can also threaten the small, organic farm movement in the Western part of the state that is the breadbasket for the entire Commonwealth as the Eastern Mass fisheries supply Western Mass with fresh fish. Escalating water prices are threatening farmers around the country, as we have learned from Thirst and also from Food and Water Watch.

We urge your support in opposing this bill.

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