O'Fallon Progress

Letter to the Editor: Plenty of risks going private

To the Editor:

City officials have stated that a privately owned for profit corporation will pay $50 million or more to entice the city into leasing our water and sewer system to them.

I do not believe that such a large payment would be made up front unless that money plus interest and a large profit for the company is expected to be returned over the term of the lease, which is expected to be 40 years. A privately owned corporation must also pay state and federal income tax, provide a return to shareholders and has higher borrowing costs when money is needed for infrastructure improvements. All of this money simply leaves the city.

Our city owned water and sewer system has none of these costs. Common sense tells me that water and sewer service provided by a private corporation will be more costly for the citizens and businesses of O’Fallon. This is substantiated by an independent nation-wide survey, which shows that the cost of water service is 33 percent higher, and the cost of sewer service is 63 percent higher when provided by a private corporation.

Additional risks of having our water and sewer service provided by a private corporation include degradation of service, lack of quality maintenance for infrastructure and reduction of local control and public rights. The primary objective of a private corporation is to maximize profits, not to protect consumers. These companies can only increase profits through higher rates and fees, decreasing service expenses and decreasing capital and maintenance expenses.

Our community-owned water and sewer system provides good service at an affordable price. The EPA estimates government-owned systems make up the vast majority of our nation’s water and sewer utility segment, accounting for approximately 84 percent of all community water systems and 98 percent of all community wastewater systems.

There are good reasons for this and no valid reasons for considering the lease of our community-owned water and sewer systems.

Please Vote No Twice on the April 7 referendum questions. You can find additional information about water and waste water privatization issues at this web page: foodandwaterwatch.org.

Bob Kueker