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Heartwell Proposes Grand Rapids Privatize Water Services

September 29, 2010

It was reported today in the Grand Rapids Press that Grand Rapids Mayor George Heartwell is proposing to both consolidate and privatize some of the current services the city provides.

Press reporter Jim Harger states that there are some “low-hanging fruit” and some “big ticket” items that the Mayor is proposing for either consolidation or privatization. Among those identified for possible privatization in the story are, city’s emergency medical services currently handled by city firefighters; merging motor fleet operations with Kent County and neighboring cities; and privatizing the city’s water and sewer systems.

The article only sources the Mayor who said he expects resistance from within the city government since it will mean some employees will lose their jobs.

On the matter of privatizing the water and sewage services, Heartwell admitted that he has been in contact with private companies, but none have made any offers.

We should not be surprised that this is the direction that Mayor Heartwell wants to take the city, since consolidation and privatization were the main themes of his State of the City address in January. On the surface in it seems quite understandable that this is a direction the Mayor wants to go in considering the budget deficit they are facing. However, what is really happening with Grand Rapids and communities all across the country is what has been happening for decades around the world – it’s called Structural Adjustment.

Structural Adjustment (SAPs) is a policy that the IMF and the World Bank impose on countries seeking loans, a policy that the US has endorsed. These SAPs advocate for cutting government spending, privatizing public services and opening up markets to outside entities, most often corporations.

If Grand Rapids were to go the route of privatizing both the water and sewage services, what might be some possible outcomes of that decision?

The organization Food & Water Watch has been looking at this issue for years and provides us with important documentation that sheds light on what we can expect if Grand Rapids were to privatize its water and sewage services.

In one report entitled “Money Down the Drain,” the key findings state that:

  • Private utilities charge higher rates than municipalities
  • Privatization does not increase the efficiency of water and sewage systems
  • Privatization has many hidden expenses
  • Water corporations drive up costs and shoot down service quality
  • The public can do it better and cheaper
  • Public funding for water must go to only public utilities

Another report, “Faulty Pipes: Why Public Funding, Not Privatization – Is the Answer for US Water Systems,” provides numerous examples and case studies of when privatization has been disastrous for municipalities. One example they look at is the city of Milwaukee, which is comparable in size to Grand Rapids.

In 1998, they privatized their water services and gave the contract over to the multinational water giant Suez. Shortly after that rates went up, services diminished and polluted water was being piped into Lake Michigan. Food and Water Watch has dozens of case studies, which show that municipal water privatization does not work.

Unfortunately for readers of the Grand Rapids Press, the reporter did not explore the potential consequences of privatization and just reported that the Mayor of Grand Rapids was considering taking these steps.

We cannot let something as fundamental to our lives as access to clean water, be placed in the hands of private corporations. We all should send a message to the city that this is unacceptable and organize ourselves in order to fight this proposed privatization.

9 Comments leave one →
  1. Kate Wheeler permalink
    September 30, 2010 4:45 am

    Has George Heartwell lost his mind? Many people in Grand Rapids cannot afford their water bills now–the City has raised the costs exponentially, especially over the past few years. So his solution is just to dump the whole problem in the laps of some private management firm that will have carte blanche to charge what they want?

    This is an abandonment of his public service on a shameful level. If he wants to make “painful” decisions–as stated in the Press article–then he should start by supporting an across-the-board pay cut to the over-inflated City salary structure, with larger cuts for manager-level salaries and above; eliminating the unaffordable City pension program; boycotting the City’s participation in the failed Michigan revenue sharing program; and taking a look at potential savings in the retiree health care plan.

    There is no reason for retired City workers to be receiving pension pay of several thousands of dollars a month PLUS completely paid-for health care. Especially not when a large portion of the City’s citizens have neither of those benefits, and many are unemployed or underemployed. City workers should not be treated like some privileged upper class among our citizenship. But they are, and we’re paying a huge price to maintain that, while the services that our taxes should be covering are dwindling away to nothing. The City is even talking about making us pay for the electricity for our streetlights!

    Privatizing the water system is just shifting more monetary burden on the citizens of Grand Rapids, who are already juggling more costs than they can bear. It also takes away any public element to the managment of that crucial utility. That’s not a solution. It’s a cop-out.

  2. October 21, 2010 7:39 pm

    I am in shock. Why on earth would Mayor Heartwell want to partner with a company like Suez? Suez has privatized water in so many countries and creative destructive water wars with their methods. They intentionally price water at a price that is unaffordable in many impoverished countries. Why would we want to support such a company when we as a city tout ourselves to be conscious of earth issues and sustainable?

  3. October 22, 2010 3:41 pm

    Uma, I can understand how you might be shocked by the Mayor’s proposal to privatize the municipal water system in GRand Rapids. However, considering the City is faced with a major funding crisis and the Mayor has made strong alliances with the businesses community and the Chamber of Commerce I for one am not surprised that privatization is on the table. The more important this is how do we respond to this. Thanks for your comments.

  4. cbear permalink
    February 13, 2011 5:15 pm

    can anyone update the ongoing pilot program to install a radio reading system for water meters?

  5. Jeff Smith permalink
    February 13, 2011 5:40 pm

    cbear, I don’t know the answer to that question, but it would be worth inquiring about.


  1. Under Water: The Grand Rapids City Budget and the Privatization of Water « Grand Rapids Institute for Information Democracy
  2. New Report confirms fears about the possibility of Grand Rapids privatizing its water system « Grand Rapids Institute for Information Democracy
  3. Corporate Multinationals and Grand Rapids water system « Grand Rapids Institute for Information Democracy
  4. Discussion on Water Privatization at the Bloom Collective 4/26 « Grand Rapids Institute for Information Democracy

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