Baltimore just took a big step toward becoming the nation's first major city to ban the privatization of its water and sewer system.
The Baltimore City Council overwhelmingly approved a charter amendment yesterday that makes the sale or lease of its water system illegal, The Baltimore Sun reports. The measure ensures that the public owns and controls the water system.
Baltimore Mayor Catherine Pugh, who supports the measure, has until August 13 to sign it. Then, it will be put on the ballot for voters to approve or reject in November.
City council President Jack Young, who proposed the amendment, thinks voters will approve it. "I think overwhelmingly the citizens of Baltimore are going to vote to keep a system that's an asset to them," he said, according to WBAL. "I think they're smart enough to realize that this belongs to them. It doesn't belong to me, personally, it belongs to the citizens of Baltimore. I want to make sure that it stays that way."
For years, companies have been making the case for privatization. The French company Suez Environment, for instance, has proposed what seems like a mutually beneficial deal. The Sun reports:
Suez—a descendant of the company that built Egypt's Suez Canal—has pitched city officials on a lease agreement in which the company would pay the city upfront to take control of operating Baltimore's water system and then collect the money charged from water bills. The company has said it would hire current Department of Public Works employees, honor union contracts, and pledge to raise water rates only minimally.
Proponents of a ban on privatization say it would raise rates and generally hurt customers. "Communities that have privatized their water systems see skyrocketing rates, lost jobs and declined quality of service, because when corporations come in to run water and sewer systems, they have one goal and one goal only, and that is profit, not the public good," Rianna Eckel, a state organizer for the advocacy group Food and Water Watch, tells WBAL.
But private companies' concerns about making a profit may actually help consumers. As Reason's Adrian Moore noted in 2016:
Private utilities simply borrow the money to build new water supply pipelines or treatment plants when they need them, and they have every incentive to build them fast and keep costs down. In contrast, for a municipal utility it is a long and painful political process, fighting against other agencies and political priorities, to get approval to borrow money to build new facilities.
Plus, privatizing water systems and other utlities means less long-term risk for cities. "Sales and leases," says Reason Foundation policy analyst Austill Stuart, "allow cities to transfer risks of deferred maintenance to the private sector."
According to the National Association of Water Companies, private water companies serve nearly 73 million people on a daily basis. These private utilities are accountable to their customers, and that accountability motivates them to provide better service. Unfortunately, Baltimore residents may never get the chance to experience such benefits.
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