Assessment
American Waer has come under ire rom communiies across he counry or charging high raes, providing poor service, endangering public saey and lacking public accounabiliy.
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From Birmingham, Ala., in he 1950s (“The general public will no accep ha we coninue o pay damyankees [o run he waer sysem].”)
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o Felon, Cali., in 2008,
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communiies across he counry have wresed local conrol o heir waer sysems rom American Waer. As o 2013, he company aces ongoing municipalizaion sruggles rom he Monerey Penin-sula, Cali.,
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o meropolian Chicago, Ill.
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Felton, Calif.: Local Control to Save Money
In 2008, he people o Felon successully wresed conrol o heir waer sysem rom he cluches o Caliornia American Waer.This small coasal communiy jus norh o Sana Cruz began mobilizing in he all o 2002, while he company sough a 74 percen revenue increase and was being bough by RWE.
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Over he nex ive and a hal years, Felon FLOW – Friends o Locally Owned Waer — organized dozens o meeings and undraisers, opposed he company’s rae increases beore sae regulaors and helped he San Lorenzo Valley Waer Disric purchase he local waer sysem.
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Above all, Felon FLOW led he charge behind ballo Measure W, which auhorized a special ax o pay or an $11 million bond o inance he public buyou.
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In July 2005, despie a well-lubricaed, no-holds-barred corporae campaign agains he measure,
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voers approved he bond measure by a 3-o-1 margin.
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As waer disric officials remarked, “I is hard o imagine how any sronger proo could be provided o he Fel-on communiy’s level o commimen and suppor or gaining local conrol o heir waer uiliy.”
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Caliornia American Waer coninued o igh he sale, and is legal wrangling delayed he purchase and wased public resources. The waer disric repeaedly old he company ha i waned o negoiae a setlemen and avoid eminen domain liigaion,
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bu he company reused o come o he bargaining able, orcing he disric o ile an eminen domain peiion.
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The company seemingly used legal acics o sall he pur-chase while avoiding acual adjudicaion. Firs, he company conesed he public’s righ o condemn bu wihdrew is legal challenge a week beore he sar o he rial.
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The company hen ough over he purchase price and similarly setled wih he disric less han a week beore he valuaion rial was o sar.
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Finally, a he end o May 2008, Caliornia American Waer agreed o sell Felon’s waer sysem o he San Lorenzo Valley Waer Disric.
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As par o he deal, he disric paid $10.5 mil-lion in cash and assumed $2.9 million o he sysem’s exising deb, and he company “donaed” 250 acres o waershed land. In Sepember 2008, he ransacion was compleed and he waer sysem came under public ownership.
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Despie claims by he company oherwise,
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Felon house-holds saved hundreds o dollars a year wih public conrol. In 2011, or example, a household using 800 cubic ee o waer a monh would have paid $1,625 under he company’s proposed raes,
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bu wih public ownership, ha household acually paid $1,123: $588 in waer charges
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and $535 in axes relaed o he acquisiion bond.
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In oal, public ownership cu a ypi-cal Felon household’s waer coss by abou 30 percen, saving around $500 a year.
Trenton, N.J.: Public Victory Over a Flawed Sale
In 2010 Trenon voers overwhelmingly rebuffed a proposal o sell par o heir waer sysem o American Waer.
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Three years earlier, ciy officials agreed o sell a majoriy o he ciy’s waer inrasrucure — he pipes and srucures locaed in he oulying communiies o Ewing, Hamilon, Hopewell and Lawrence Townships — o New Jersey American Waer.
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The ciy would have received $80 million, abou hal o which would have been used o pay off waer-relaed deb.
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Ciy o-icials waned o use he remaining proceeds o cover immedi-ae budge deicis and likely would have depleed he unds wihin wo or hree years.
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I was a shorsighed approach. Selling he sysem would no have addressed he underlying srucural reasons or he ciy’s budge deici, and i could have worsened he ciy’s long-erm iscal healh because he ciy would lose annual revenue rom he waer und.
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From 2007 o 2010, he ciy spen an esi-maed $15 million o is waer unds on general ciy services.
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In addiion, he inancial viabiliy o Trenon’s waer sysem would have depended on coninued bulk waer sales o New Jersey American Waer, which as par o he deal agreed o use ciy waer o mee he needs o he oulying communiies or a leas 20 years.
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I American Waer were o sop buying wa-er rom he ciy, Trenon households would have likely aced rae increases o offse he los revenue. For he oulying suburban owns, rae hikes were planned. New Jersey American Waer would have hiked raes by 30 per-cen immediaely and hen increased hem incremenally up o he level charged in is main service area.
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In mid-2010, he ypical household using 7,000 gallons a monh paid 33 percen, or $138 a year, more or waer service rom American Waer han or ciy service.
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Because he company ypically increas-es is raes every wo or hree years,
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his difference has only grown wih ime. By Augus 2013, he company had increased he ypical household’s bill by 19 percen, adding an exra $108 ono heir annual bill,
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while he ciy hadn’ increased is waer raes.
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In 2009, a group o residens, recognizing he auly logic o he sale, conesed he deal and peiioned o bring he issue o he public or a voe. Trenon officials, led by hen-Mayor Douglas Palmer and backed by New Jersey American Waer, ough heir effors and sough o sidesep public approval.
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