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Citizens Call on Stockton?s City Council to Vote “No” On Inadequate, Incomplete Privatization Plan

Feb. 26, 2002

Citizens Call on Stockton?s City Council to Vote “No” On Inadequate, Incomplete Privatization Plan

Coalition Decries Mayor?s Evasive Tactics, Turns in More Than 2,000 Signatures in Opposition

STOCKTON, Calif.- A broad-based coalition of organizations today called for Stockton?s City Council to vote against inviting companies to operate the city?s water and wastewater treatment systems.

The groups detailed their reasons during a press conference held shortly before the City Council was to vote on the issuance of an incomplete ? and possibly illegal ? Request for Proposals (RFP) inviting companies to bid to operate the water systems. Further, the groups denounced the mayor for releasing the document and announcing the vote only last Friday, Feb. 22, which allowed no time for public review.

“What?s he trying to hide?” asked Jane Kelly, director of the California office of Public Citizen, a national consumer advocacy organization that opposes privatization of critical public services such as water delivery. “If the mayor thinks this is such a great idea, then why isn?t he willing to make the process open to all?”

Presenting petitions signed by more than 2,000 Stockton residents to the mayor?s office, the organization Concerned Citizens of Stockton emphasized the broad community opposition to privatizing the city?s water services. “People in Stockton, when asked, do not support this approach to dealing with our water,” said Jerry Briscoe, chair of the group.

The RFP may be illegal because city officials didn?t comply with state labor laws, which require the city to bargain over its terms with its unionized work force. The municipal water department employees are unionized. And the RFP is incomplete because the city omitted certain labor provisions, saying they will be added later.

The city will face at least one lawsuit if it approves the RFP tonight. Operating Engineers Local 3, which represents more than three quarters of the city?s utility department employees, has filed several unfair labor practice charges with the state?s Public Employees Relations Board, the most recent based on the mayor?s referral to the council for action tonight. That filing says the city violated its duty to meet and bargain in good faith.

“The RFP cannot be approved without bargaining to a successful conclusion or a legal impasse, and the city has done neither. They can?t proceed until they do that. We intend to file for an injunction in court that will stop the process,” said Dean Cofer, the business representative for the union.

Stockton?s City Council decided in 1999 to consider hiring a private company to operate the city?s water systems. Three potential bidders have expressed interest in running the systems, each of which is owned or partnered with a large multinational corporation: US Filter (Vivendi of France), OMI/Thames Water (RWE of Germany) and United Water/California Water (Suez Lyonnaise of France). Further, the company hired by the city to provide consulting services, ARI, is a member of the National Council for Public-Private Partnerships (NCPPP), whose mission is to “to advocate and facilitate the formation of public-private partnerships at the federal, state and local levels.” (“Public-private partnership” is a euphemism for privatization.) ARI?s fellow members include the companies competing for Stockton?s contract. This creates a potential conflict of interest, Public Citizen said.

“This is like walking into a courtroom to find that the judge is being paid by the other side,” said Sylvia Kothe of the Stockton League of Women Voters. “It is clear that the decision to privatize has been made covertly, but never voted on or discussed in public. The League opposes this attempt to bypass public input or a direct vote on the most important issue before us ? whether or not to privatize.”

Local 790 of the Service Employees International Union (SEIU) has steadfastly opposed privatizing the city?s services. “On behalf of our members who pay utility bills and taxes in Stockton, we call upon the City Council to stop pouring more money into this plan,” said Patrick Ikeda, president of Local 790. “Keep our public resources out of the hands of companies that have to make a profit on top of rates.”

Stockton?s Municipal Utilities District has been able to cut costs in the past two years, resulting in savings that the agency estimates would be sufficient to perform necessary repairs without raising rates for the next 10 years. The contract as proposed in the RFP would last for 20 years, a period of time that goes far beyond the terms of office of any of the current member of the council or the mayor.

The coalition argues that in the pursuit of lower operational costs and higher profits, private companies could neglect maintenance, especially if their contract is close to expiration. Further, when the individuals closely involved in the original contract negotiations are no longer present, disputes over contract language likely will have to be resolved in court. In the end, the city may not receive what it believed it paid for when the contract was signed.