The Top Five Reasons to KeepOregon’s Water in Public Hands

WATER

The research shows five main ways that private control of water is a bad deal for Oregon.

1. High Rates.

The typical Oregon household pays16 percent more for water from Avion Water Company,the state’s largest private water utility, than for service from a public utility (see figure 1).

Coos Bay (sewer).

Coos Bay increased sewer rates by 17 percent in 2006 and by 25 percent in 2007 tofinance improvements for its stormwater system andthe OMI-operated wastewater plants, whose sewagespills plagued the city. From 2003 to 2007, the typi-cal household’s monthly bill more than doubled to$45.

Meanwhile, OMI’s annual contract payments jumped 46 percent from 2000 to 2008.

2. Expensive Financing.

Private financing is farmore expensive than public financing (see figure 2).

From 2000 to 2007, even the best-rated corporate bond was 32 percent more expensive than a typicalmunicipal bond issued in the state, and 124 percentmore expensive than loans from Oregon’s State Re- volving Fund programs.

3. Clean Water Act Violations.

Compared totheir publicly operated counterparts, privately operatedmajor sewage treatment plants were 9 percent morelikely to have received a notice of violation in the last five years (see figure 3).

4. High Operating and ConstructionCosts.

Public control is a better deal for the ratepayerand the taxpayer.

Ontario (sewer).

In 2006 the Ontario city councilunanimously voted against privatizing its wastewatertreatment plant. The public works committee foundthat OMI could not run the plant at any significant sav-ings to the city and recommended public operation.

Wilsonville (water).

Wilsonville hired Montgom-ery Watson to design and construct a treatment planton the Willamette River in 2000.

Before receivingthis contract, the company hired a water district direc-tor who had promoted the project,

and the city decid-ed to award the deal not based on cost but on a num- ber of factors, including key personnel and financialcapacity. Critics charged that the change was a thinly veiled way to hand the contract to Montgomery Wat-son.

Within two years, rates more than doubled,

and by 2001, the city had the second-highest rates of the 34 cities in the Portland-Vancouver area.

he waters of Oregon belong to the people of Oregon,

and the resource mustremain public to keep it safe and affordable. When water and sewer systems fallinto private hands, costs grow and consumers end up paying too much for poor-quality water. It can lead to sewage spills and service problems. Because of thesefailures, taxpayer money should neither incentivize nor subsidize private ownership,management or operation of water and sewer systems.

Figure 1: Annual Water Bill of the Typical Household inOregon Using 5,000 Gallons a Month (2004)

Municipal Avion Water Company

050100150200250300350

$271.79$313.97