2
Waer Auhoriy’s ax-exemp revenue bonds have ineres raes o 2.1 percen o 5.25 percen.
12
Consequenly, a long-erm lease o a privae company would orce he uiliy o reinance he sysem’s exising deb
13
a a higher ineres rae while increas-ing he cos o uure capial improvemen projecs. Consumers would oo he bill or his inancial imprudence.
Impaired Service
Over a long-erm lease, he waer sysem could deeriorae,
14
and he privae operaor could cu corners o increase is prois a he public’s expense. A privae operaor may atemp o cu coss by downsizing he workorce and scaling back employee beneis. These pracices could worsen cusomer service. Downsizing can slow responses o service requess and emergencies,
15
and scaling back compensaion can impede he uiliy’s abiliy o atrac qualiied operaors.
16
Trapped for Decades
Privaizaion could inerere wih Reading’s abiliy o re-spond o changing circumsances and o proec he area’s waer qualiy. Long-erm leases wih privae companies are complex ransacions, and he conrac language can make i difficul or he ciy o compel signiican changes, including cerain improvemen or waer supply projecs, or o exi he deal early.
17
Over a long-erm lease, residens will have litle recourse when he privae operaor perorms poorly or ails o address heir concerns.
Fiscally Irresponsible Gimmick
Privaizing he waer sysem will no reduce liabiliies or ad-dress he reasons why he ciy’s general und is unbalanced. Raher, he lease would jus dig he hole deeper, increasing he oal deb burden while pushing i off budge and ono generaions o waer users.
18
Stop the City Council From Opening Up the Water System to Privatization
Reading aces some ough iscal decisions o balance is bud-ge. While hese decisions are undersandably dauning, ciy officials mus rise o he challenge and ace he issue head-on in an open and ransparen manner. They mus avoid budge gimmicks like leasing he waer sysem o a privae company, which merely creaes he illusion o balanced budges while increasing uure coss or households and local businesses. Insead o morgaging is waer resources and sacriicing local public conrol over a vial service, Reading needs a real solu-ion ha osers inancial susainabiliy. Reading should keep local public conrol o is waer sysem.
Take Action
Ac now o sop a privae akeover o one o your mos valu-able public resources — your waer. Tell he ciy council no o lease your drinking waer sysem o a privae company.
Rate Hikes Following the Privatization of Large Pennsylvanian Water Systems
A
(as of May 2014)
Municipality
(Seller)
Corporation
B
(Buyer)
Date of SaleTypical Annual Household Bill
dollars)
C
Increase
dollars)
C
Before
(Public)
After
(Private 2014)
IncreasePercent Increase
Bensalem TownshipAqua America1999
19
$105
20
($147) $667
21
$562 ($520)537%(354%)Bristol Borough AuthorityAqua America1997
22
$120
23
($174) $720
24
$601($546) 503%(313%)City of Coatesville AuthorityAmerican Water2001
25
$320
26
($422) $732
27
$412($309) 129%(73%)Media BoroughAqua America1995
28
$181
29
($278) $720
30
$539($442)297%(159%)West Chester Area Municipal AuthorityAqua America1998
31
$205
32
($294)$720
33
$515($426) 251%(145%)
Average$526($449)343%(209%)