DeMaio’s stumble sign of things to come in ‘privatization’ scheme

by Elanor Starmer /  Voice of San Diego / Originally posted July 7, 2010

If there were ever any doubt about the extent of waste and ineffectiveness in private contracting, San Diego City Council member Carl DeMaio has just given us more proof.

Since his election to City Council, DeMaio has been relentless in his attempts to privatize San Diego’s city services, including the city’s drinking water and wastewater systems. In the latest attempt, DeMaio paid over $160,000 for contractors to gather signatures from San Diegans in support of a proposed ballot measure that would have required the city to take bids from private contractors for services. The measure would have also allowed the city to directly privatize services without taking a public bid and would have eliminated the city’s living wage and domestic partnership benefits ordinances.

With much fanfare, DeMaio delivered 134,000 signatures to City Hall, far more than the 96,800 legally required to get the measure on November’s ballot. On Monday, the city clerk declared that the invalidation rate on the signatures was so high that the measure had failed to qualify. The estimate was that only 75,000 of the signatures were valid — a 44 percent invalidation rate.

The utter incompetence of DeMaio’s hired petitioners is just a sign of things to come if DeMaio’s privatization efforts move forward in San Diego. When public water systems are privatized, profiteering bosses tend to deliver poorer service, stall on completing maintenance and upgrades and raise rates for consumers in order to boost returns for shareholders. Our research has shown that nationwide, consumers in cities with privately-managed water systems pay 20 percent more on average than those in cities where the water systems are public, and sewage spills and leaks are more common in private systems.

In California, at least nine cities have taken back their water systems from private companies because of the failures of privatization. Petaluma ended its wastewater contract with Veolia in 2007 after a cost analysis revealed that public operation was 18 percent cheaper, saving $1.6 million over three years. The Fairfield-Suisun Sewer District ended its private contract with United Water after independent consultants found that public operation would reduce operational costs by 10 to 15% while offering better benefit packages.

Contracted signature gatherers like the ones DeMaio used often give a money back guarantee if more than 25 percent of the signatures are invalid. Since the invalidation rate of his initiative was 44 percent, DeMaio may see the $160,000 he spent flow back into his coffers. But if San Diego city services are privatized, ratepayers won’t be so lucky.4

Elanor Starmer is the Western Region director for Food & Water Watch