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Citizens Triumph Over Corporate Control of Water in Stockton; Court Backs Residents in Water Privatization Case

Oct. 28, 2003

Citizens Triumph Over Corporate Control of Water in Stockton; Court Backs Residents in Water Privatization Case


Statement of Juliette Beck, Coordinator, Public Citizen’s California Office, Water for All Campaign

Last week’s legal victory in Stockton should be a cautionary tale for cities toying with privatizing their water systems. Judge Bob McNatt ruled that Stockton’s 20-year, $600-million privatization contract was invalid because the city failed to conduct a thorough environmental review. The city has been ordered by the court to conduct this review, which will likely send the contract back to the drawing board. This time, the public should have its say.

Residents of Stockton, a community of 250,000 in the heart of California’s Central Valley, where water is a precious commodity, have been battling for more than two years for a say in the future management of their water system. After numerous city council meetings where officials repeatedly rebuffed their concerns, a local coalition took its battle directly to voters and passed a citywide initiative that should have given the public a final say over the water services contract with OMI-Thames. But unfortunately, the city had fast-tracked the contract negotiations and approved the deal less than two weeks before the initiative was passed by voters. After an attempt to overturn the city council’s precipitous approval failed, community groups took the matter to court.

More often than not, privatization deals are hatched from the collusion of corporate interests and elected officials snookered by empty corporate promises. This alliance strives to lock citizens out of the process and grease the skids toward a contract—as was the case in Stockton. But the rush-job approach to public policy has come back to bite OMI-Thames and the Stockton City Council. Projected—and optimistic–cost savings are being eaten away through developments like this belated environmental review mandate. After witnessing the burgeoning costs of privatization, residents would do well to vote against any such contract in the future.

Around the world, the promises of benefits from privatization have proven to be hollow as profit-seeking corporations cut corners, slash services, lay off experienced personnel and increase rates. The city of Atlanta learned this the hard way when it had to cancel its water services privatization just four years into a contract with United Water.

Beware the private company that oversteps its bounds when negotiating with citizens’ public services. Sometimes they step on the wrong toes, like those of concerned citizens who refuse to surrender their constitutional rights.