Privatizing Baltimore's water system isn't the answer. Banning privatization isn't either

Baltimore’s City Council worked at warp speed this week to pass a charter amendment banning the privatization of the city’s water system. You’d think, from the procedural hoops Council President Bernard C. “Jack” Young hurdled Monday to get the proposal before city voters this fall that someone was seriously trying to sell Baltimore’s vast system of pipes, pumps and reservoirs. But they’re not. Mayor Catherine Pugh (whose signature will be required before the measure lands on the ballot box) proposed the same idea earlier this summer. Some representatives of companies that manage municipal water systems elsewhere have reportedly met with administration officials, true, but that’s happened periodically over the years with no result. In terms of threats Baltimore faces, this doesn’t appear to be a big one.

That’s not to say we oppose the charter amendment or even think it a waste of time. (How could it be, given how little time the council spent considering it?) Baltimore should not sell its water system or enter into a contract with a private firm to operate it, and the proposed charter amendment would ban both.

Some make a philosophical argument that something so vital as the water supply should not be in the hands of a profit-making corporation, but on a practical level, it can work. Many cities worldwide have private water systems (Baltimore did too, back in the 1800s), or at least public-private partnerships for their operation. Privatization opponents point to horror stories in terms of water quality or reliability of service when for-profit companies are involved, though public systems aren’t perfect either. The water quality crisis in Flint, Mich., wasn’t the result of privatization but public sector budget cutting, and Baltimore has certainly had its share of problems, from wildly inaccurate bills to injustices related to tax sales. Food and Water Watch, which has opposed privatization efforts across the country, points to its own survey data showing water rates average 58 percent higher in privatized systems. Privatization advocates dispute that, but academic studies of the issue find, at best, a mixed record for privatization when it comes to costs.

In fact, perhaps the best argument for privatization is that it does lead to higher costs. The theory is that government chronically under-invests in long-term infrastructure upgrades because political officials are worried about the next election and, thus, unwilling to raise rates. That would have been a bang-up argument to privatize Baltimore's water 50 or 60 years ago, as that’s precisely what happened here for decades. But in the early 2000s, the EPA forced the city into a consent decree to upgrade its water and sewer infrastructure, and Baltimore has been raising rates by about 9 percent per year since.

A private company running the water system would need to make a profit. It could achieve that by raising the price of water or cutting operating costs, but the big driver of Baltimore’s recent rate increases, the need to make billions of dollars in infrastructure upgrades, would remain. To those who argue that a private company would inherently run the water system more effectively than the city, we would note that it would be the city that would need to set the parameters for a contract, run the bidding for a contractor, establish performance measures and monitor compliance. That’s not inherently easier than running the system directly.

For all those reasons, we think it’s perfectly appropriate to put an anti-privatization provision in the charter. That wouldn’t mean Baltimore could never privatize, just that a public vote would be needed first.

But what we should not do is pretend that banning privatization actually solves anything. City rate payers are still being squeezed by the costs of infrastructure, billing is still haphazard, and conflict remains over this regional resource — witness the current dispute with Baltimore County over $23 million in disputed bills. Rather than worrying about a sale of the water system that nobody is advocating, Baltimore officials should use it as an entree into a broader conversation with the suburban counties over regional issues, from education to housing to public transportation. That’s the real value of Baltimore’s control of the system.

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