Detroit Greens a local of the Green Party of Michigan

By Wenonah Hauter and Maureen Taylor, pubished in the Detroit Free Press, May 6, 2010

Like many cities around the country, Detroit is looking to raise revenue to expedite its economic recovery. While selling the city's Water and Sewerage Department to a private company may sound like an efficient means of doing so, privatizing the drinking water and sewage systems would result in higher rates, degraded service and job cuts.

Whatever revenue the city could raise by selling DWSD would simply be extracted from the community through higher water rates. The company that purchases DWSD will ensure that it recovers its payment to the city, plus profit. That means higher rates for residents.

Compared to municipalities, private utilities charge as much as 80% more for water and 100% more for sewer service. Selling DWSD may raise revenue, but it will simply be taxing Detroit residents through their taps.

Privatization has already begun in the city's system. Each year, millions of dollars worth of work that used to be done by DWSD employees has been contracted to outside companies.

Across the country, municipalities have seen their water rates rise dramatically following privatization, and service often worsens.

Taxpayers in Indianapolis have battled sewage overflows in their privately managed wastewater system for years. When the EPA finally intervened, taxpayers, not the private company, were left with billions of dollars of improvements.

The most infamous example took place in Atlanta, Ga., which is considered by many as the first major water utility privatization failure in the U.S. In 2002, after just four years, the city terminated its 20-year, $428-million contract with private provider United Water.

United Water's decision to downsize the system's workforce by 400 jobs resulted in a maintenance backlog of 14,000 work orders, countless billing errors and delayed repairs. These problems ultimately cost the city millions of dollars. To top it off, the company was also linked to questionable payments to then-Mayor Bill Campbell, who was ultimately sentenced to 30 months in prison for federal tax evasion.

Selling DWSD would also lead to more job losses in a city with nearly 30% unemployment.

Research shows that privatization of drinking and wastewater leads to layoffs: In a survey of 10 privatizations, corporate takeover led to an average job loss of 34%.

In what is already a tough job market, the city of Detroit should be helping people find work, not sacrificing existing jobs.

We all know that Detroit's coffers need a serious influx of cash. But abdicating control of its water and sewers is no quick fix.

Wenonah Hauter is executive director of Food & Water Watch. Maureen Taylor is state chair of the Michigan Welfare Rights Organization.

www.foodandwaterwatch.org
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