In Marin County, a Public Fight Over Private Control of Sewage
New York Times
12/04/2009
Pam Welsh was a retired risk management analyst immersed in her family’s life when she learned this year that her Marin County bedroom community was considering a contract to have the world’s largest water company operate the local sewage plant.
Mrs. Welsh, 59, soon became a woman obsessed. She was certain the proposal would mean higher rates and poorer service for those under the jurisdiction of the Novato Sanitary District as the company, Veolia Water North America, sought to increase profits.
Her campaign, which included a petition drive, was met with a strong counterattack by the Novato Sanitary District board and others who prefer private-sector management. It is a timely subject of debate in the Bay Area, where communities have been wrestling with the broader question of whether private-public partnerships in municipal services make financial and environmental sense during tough economic times.
Nationwide, cities spend almost $70 billion a year on their water and sewage systems. Municipal systems provide for the needs of about 80 percent of those served by sewers, industry sources say. Local supporters of Veolia’s five-year, $15 million contract with Novato say it will save ratepayers $7.2 million.
But money is just one metric for these systems, which are regulated under the federal Clean Water Act. That law requires them to keep watersheds and beaches free of pollution — something Novato has failed to do.
In May, the Novato agency’s offices were raided by investigators with the Environmental Protection Agency, who hauled away boxes of documents. The raid came after the E.P.A. received a tip that in 2007, long before Veolia was in the picture, the district purposefully discharged sewage into San Francisco Bay while preparing to build a $90 million treatment plant.
In addition, 57 spills — totaling more than 440,000 gallons of untreated sewage — earned Novato’s sanitary district the No. 19 spot in a new statewide report ranking collection systems by the amount of sewage spilled. It is among seven local agencies in the top 20 for the period from January 2007 through October 2009.
At the time of the E.P.A. raid, the district was running the system. But Veolia, a subsidiary of Veolia Environnement, based in Paris, has had environmental problems elsewhere in the region. In a 2005 Richmond case, the nonprofit environmental organization Baykeeper and the West County Toxics Coalition sued the company, accusing it of discharging sewage into the bay. Veolia and Richmond, also a defendant, settled the case, agreeing to major upgrades.
In Novato, the district board voted unanimously in September to have Veolia operate its sewage treatment plant.
But Mrs. Welsh and her allies in the Alliance of Concerned Citizens of Novato helped circulate a petition to have the contract put on the ballot next June. For now, instead of being the operator, the company will be a consultant to district managers until voters decide if they want the deal.
Novato’s system is not big. It processes 1.79 billion gallons each year, compared with 300 billion gallons treated throughout the Bay Area. Yet because three other systems — Fairfield-Suisun and Petaluma in the Bay Area and Stockton in the Central Valley — recently severed ties with private companies, people are closely watching this fight to see if the trend continues.
Mrs. Welsh said corporations were “there to make money for shareholders, and I don’t believe it’s in the community’s interest to pay for profit for waste water or drinking water.”
Mike Di Giorgio, president of the Novato board, said he was not bothered by Veolia’s potential profits because he was confident the contract would save ratepayers significant money.
The arguments on both sides are familiar to experts. A 2002 report by the Pacific Institute, based in Oakland, noted that supporters of privatization usually argue that the private sector will deliver more or better services, while opponents say it could lead to higher costs, the potential for lost jobs or benefits and reduced local control.
“The devil is in the details, and the details are in the contracts,” said Peter Gleick, the institute’s president. “We’ve seen over and over where small municipalities rarely have the power or ability to negotiate good contracts.”
Those details include how rates are adjusted and how profits are distributed, Mr. Gleick said.
