Missoula, MT and Florida officials share stories of public water success

On Sept 22nd, public officials from Florida and Missoula, MT visited Charleston to share their stories of creating public water systems to replace failing private systems. Here's the story from the Charleston Gazette-Mail:

"A community-advocacy organization that wants a public water system for the Kanawha Valley is hoping local government officials follow the lead of others who have taken over their own water systems.

Advocates for a Safe Water System brought officials from Montana and Florida to Charleston tell their stories Thursday about taking over their respective water systems and making them public.

Missoula, Montana, Mayor John Engen, along with one of his former advisers and two of the city’s attorneys, met with state and local leaders at the University of Charleston.

They also met with the Gazette-Mail earlier in the day and were scheduled to speak at a public forum at the university Thursday night.

“The fact of the matter is that we in Missoula believe that public water is essential to the communities’ longterm well-being,” Engen told the Gazette-Mail. “There is no security in private ownership, particularly the private ownership that exists today.”

He said water systems have gone from having a “family atmosphere” to being driven by profits.

“The profit is what drives every decision,” Engen said. “And the profit around an essential resource — the stuff of life ought not be driven by profit motive. They need to be driven by public interest.”

Missoula, a city of about 70,000 people in western Montana, is in the process of taking over their water system by eminent domain.

The city first tried unsuccessfully to acquire the water system by eminent domain 30 years ago. When the Carlyle Group bought the water system along with others in 2010 for $150 million, the city supported the deal with the understanding that the city would be able to buy the Missoula portion later, Engen said. The Carlyle Group did offer to let the city purchase the water system, but they asked for $120 million, which was almost double the $65 million the city offered to pay, Engen said. So the city went to court to acquire it through eminent domain for $88.6 million, Engen said. The case went to the Montana Supreme Court, which ultimately sided with the city last month.

“We don’t have the keys but we’re ready to change the sign on the door,” Engen told officials.

The water system in Missoula has a 52 percent leakage rate, meaning more than half of the water that is pumped never makes it to customers, Engen said.

The Missoula system’s water lines are in disrepair, and at the same time, there has been little transparency about how its previous owner was spending money on so-called capital investment projects, attorney Natasha Jones said.

Jones said officials learned through discovery in legal proceedings that the company had left the local public service commission in the dark about how it was actually spending money.

Advocates for a Safe Water System formed after the 2014 chemical leak that contaminated the water for more than 300,000 West Virginians.

“We came to believe a public system is really the way to go and we were very deliberate about that,” said Karan Ireland, a Charleston City councilor and a steering member for Advocates for a Safe Water System. “[There were] some people that inherently thought that public is better but we were careful not to jump on board with that until we really tried to figure out what we needed here.”

Ireland said the organization has been meeting with representatives of municipalities and counties that are served by the Kanawha Valley treatment plant in Charleston.

“We just came away with the this realization that a lot of West Virginia municipalities are unhappy with West Virginia American Water,” Ireland said. “The response time, the main breaks — all the things that we hear about in the news.”

Ireland said 40 percent of the water from the Charleston treatment plant leaks.

The state Public Service Commission last granted West Virginia American Water a rate increase of $18.2 million or 15.1 percent in February. The rate hike meant about a $6 increase on customers’ monthly bills. In March, the companynotified local officials of its intent to add a surcharge to bills to help pay for improvements to the system.

Both the rate hike and the surcharge won’t go toward helping the water company recoup the costs related to the 2014 spill. Those costs are likely to be taken up in another PSC case.

Officials also heard from Steve Spratt, general manager of the Florida Governmental Utility Authority, who in 2013 managed the public buyout of Aqua Florida, the state’s largest private water utility. The authority was formed to acquire privately owned investor-owned utilities, Spratt said.

Local Florida governments have liked having the authority take over their water systems because it gave the transparency of public meetings and open records, he said. Since the deal went through in 2013, some of the local jurisdictions have bought back their water systems from the authority after the authority makes needed improvements to them, he said.

FGUA has an $87 million operating budget and a $62.1 million capital investment plan, Spratt said.

In one case, the FGUA acquired Aloha Utilities after residents complained for years about foul-smelling water.

Spratt advised local leaders not to give up looking for alternatives. Bold political action is needed, he said.

Reached for comment Thursday afternoon, West Virginia American Water spokeswoman Laura Martin released a statement saying in part that the company is committed to delivering safe, clean, reliable and affordable water to the one-third of the state’s population it serves. Jordan said the company’s rates reflect the cost of service.

“Our Kanawha Valley water treatment plant has been in full compliance with all state and federal drinking water standards for at least 20 years,” Martin wrote in an email to the Gazette-Mail. “Through 2016, seven of our treatment plants have received Directors Awards for exceptional plant optimization and performance from the Partnership for Safe Water —some for as many as 15 consecutive years. Less than 1 percent of all U.S. water utilities, and no other water utilities in the state, have achieved this honor.”"