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Residents were fed up and organized Friends LinkedUp to Stop Sewer System Heist, advising the county to FLUSSSH the sale. “We want Shelby County tokeep the sewer system,” said Roger Moraski, anorganizer in the group. “What I don’t want is toopen the paper one day and see that it’s been soldand our rates are going to triple.”
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The county ended up selling the system toSouthwest Water for $8.5 million and sewer rates began their steady climbing, increasing 8 percent a year for 11 years. The base rate alone will skyrocketfrom $32.45 in 2005 to $76.64 in 2016.
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 Bob Bruce, a community member, questioned thesale. “Why are we selling the sewer system?” heasked. “It is a profitable plant. We can control ourown destiny if we own it.”
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County Commissioner Ted Crockett agreed and saidas much when he voted against the proposed sale.“I’ve always thought the sewer needed to turn aprofit,” he said, “and we’re starting to do that. I’m afinancial person, and this is what I do. I don’t think it makes sense to sell something that could make usmoney.”
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Unfortunately, they weren’t the only ones who knew the system could yield good returns. Southwest Water chairperson and CEO Anton Garnier said,“This transaction marks an important expansion of our utility footprint, a key element of our long-termstrategy for profitable growth.”
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High rates, sewage spills in Corning, Calif.
 Population: 6,200 Date of original privatization: 1990Contract: 12-year contract to operate, maintainand manage the wastewater system
Facing a cease and desist order from the stateof California because of inadequate wastewatertreatment, the city of Corning privatized its wastewater treatment plant to Southwest Water in1990. The city extended the contract in 2003 foranother 12 years.
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Rate hikes followed.In 2003, the city chamber of commerce protesteda proposed sewer rate hike that it said wouldadversely affect small businesses. The city had torework the rate increase.
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In 2004, a crowd packed a city council meeting toprotest massive rate increases. The city planned tohike sewer rates 9 percent annually for five yearsand then 3 percent annually for another five years.
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 The city needed the hikes to balance books afterpursuing an expensive sewer expansion project rightas it lost its biggest sewer client, which made up 20percent of the system’s revenue.
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 After nearly 20 minutes of riotous protest, onecouncilmember said he had enough. “This has to be done,” said councilmember Rex Roush, “none of us here are making dime [sic] on that plant and I’mgetting pretty damn tired of getting called a liar by some of the people out there.”
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Roush might not have been telling the full truth inhis outburst. Someone could have been making apretty penny on the plant expansion – Southwest Water, the contract operator whose fee most likely increased to accommodate the larger plant. Theexpansion was enough that the additional capacity “should last 20 years,” according to the public worksdirector.
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In 2008, Southwest Water got a 12 percent boost inits service fees from the city.
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 Widespread corruption in Los AngelesCounty, Calif.
 Population: 300,000 Date of original privatization: 1993Contract: 5-year, $25 million contract to design,build, operate and manage a water recycling plant 
 At least two West Basin Water District boardmembers know the spoils of privatization, but theirplundering didn’t go unnoticed.In 2004, a jury convicted R. Keith McDonald of 10federal felony counts for kickback and votes-for-cash schemes involving contractors for Carson City and the West Basin Water District.
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The chargessurrounding the water district mostly concerned a$30 million pipeline construction project for the water recycling facilities.
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Prosecutors arguedthat he demanded $140,000 from Luster National,Inc., in exchange for his help getting the company three construction management deals for the waterdistrict.
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McDonald was sentenced to 41 months inprison for mail fraud, money laundering, bribery and conspiracy to extort.
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The jury acquitted him of other charges alleging hetold United Water, which operates the district waterrecycling plant, to give him a $25,000 campaigncontribution as a reward for his approval of the5-year, $25-million contract.
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 During the trial, McDonald’s lawyer contended thatUnited Water made these allegations to federal andlocal agencies as retaliation for his scrutiny of thecompany’s performance. In letters to these agencies,he said, the company accused McDonald of slander but never suggested he tried to extort money.
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 United Water did contribute $2,000 in McDonald’srun for state assembly.
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Tyrone Smith, another water district board member,is also serving time for his role in another scheme.He allegedly extorted $25,000 from an investment banker who stood to earn 10 times as much if hisfirm handled the refinancing of the water district’sdebt.
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He pleaded guilty in the extortion andmoney-laundering scheme.McDonald and Smith are just two of the 12 people,including the former mayor, convicted andsentenced after a massive federal investigationinto South Bay political corruption.
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The entirescandal never would have occurred had the city not contracted out two public services: garbagecollection and water. A waste management firm and two water companiesallegedly hired city officials to broker deals with city council members in exchange for awarding multi-million dollar contracts to the companies. Two low-level officials at the waste management firm werealso convicted and received probation.
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 Privatization reduces public accountability and breeds an environment ripe for corruption.
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