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

WATER

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

1. High Water Rates.

The typical Florida house-hold pays 20 percent more for water and 15 percent morefor sewer service from a private, for-profit utility than forservice from a local government. That’s an extra $126 a year for both (see figure 1).

Aqua Utilities Florida (water and sewer).

In2008, Aqua Utilities Florida, a subsidiary of Aqua America, sought to impose a statewide uniform ratestructure on its 82 water and sewer systems in 16counties.

In March 2009, regulators allowed thecompany to increase rates and consolidate them intofour rate groups, with statewide rates as the long-termgoal. As a result of the change, the typical householdusing 7,000 gallons a month saw its water bill jump86 percent and its sewer bill jump 49 percent. That’san extra $500 a year for water and sewer service.

2. Expensive Financing.

Private financing is farmore expensive than public financing (see figure 2).From 2000 to 2008, even the best-rated corporate bond was

percent more expensive than a typical municipal bond issued in the state, and 184 percent more expensivethan loans from Florida’s State Revolving Fund programs.

Tampa Bay (water).

In 2002, Tampa Bay Water bought out Poseidon Resources and took ownershipover its desalination project in order to reduce fi-nancing costs. Tampa Bay Water was a well-regardedutility with a high bond rating, so it could sell bonds with low interest rates.

3. Clean Water Act Violations.

Privately op-erated major municipal sewage treatment plants were 35percent more likely than their publicly operated counter-parts to have current alleged significant violations of their wastewater permits in May 2009 (see figure 3).

4. High Operating and ConstructionCosts.

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

Citrus County (water and sewer).

In 2009, in or-der to save money during the economic slump, CitrusCounty decided to have public employees take overthe operation of eight water plants and four wastewa-ter plants that Severn Trent Services had managed.

Tampa Bay (water).

In 1999, Tampa Bay Waterawarded a contract to an engineering firm and Posei-don Resources to build and begin operating a desali-

he waters of Florida belong to the people of Florida,

and the resource mustremain public to keep it safe and affordable. Although public entities typically manage water and sewer utilities, when these systems fall into private hands,costs grow and consumers end up paying too much for poor-quality water. It canlead to sewage spills and service problems. Because of these failures, taxpayermoney should neither incentivize nor subsidize private ownership, management oroperation of water and sewer systems.

Figure 1: Typical Annual Water and Sewer Bills for aFlorida Household Using 7,000 Gallons a Month (2008)

$301$360$453$519

0$100$200$300$400$500$600

LocalGovernmentLocalGovernmentPrivateUtilityPrivateUtility

Water ServiceSewer Service