WATER

The Top Five Reasons to Keep

Florida’s Water in Public Hands
Fact Sheet • June 2009

T he waters of Florida belong to the people of Florida,1 and the resource must
remain public to keep it safe and affordable. Although public entities typically
manage water and sewer utilities, when these systems fall into private hands,
costs grow and consumers end up paying too much for poor-quality water. It can
lead to sewage spills and service problems. Because of these failures, taxpayer
money should neither incentivize nor subsidize private ownership, management or
operation of water and sewer systems.

The research shows five main ways that private control of

Figure 1: Typical Annual Water and Sewer Bills for a
water is a bad deal for Florida. Florida Household Using 7,000 Gallons a Month (2008)
$600
1. High Water Rates. The typical Florida house- $519
hold pays 20 percent more for water and 15 percent more $500 $360
for sewer service from a private, for-profit utility than for
service from a local government. That’s an extra $126 a $400 $453
year for both (see figure 1).2 $301
$300

Aqua Utilities Florida (water and sewer). In $200

Water Service Sewer Service
2008, Aqua Utilities Florida, a subsidiary of Aqua
$100
America, sought to impose a statewide uniform rate
structure on its 82 water and sewer systems in 16 0
Local Private Local Private
counties.3 In March 2009, regulators allowed the Government Utility Government Utility
company to increase rates and consolidate them into
four rate groups, with statewide rates as the long-term
goal. As a result of the change, the typical household
3. Clean Water Act Violations. Privately op-
erated major municipal sewage treatment plants were 35
using 7,000 gallons a month saw its water bill jump
percent more likely than their publicly operated counter-
86 percent and its sewer bill jump 49 percent. That’s
parts to have current alleged significant violations of their
an extra $500 a year for water and sewer service.4
wastewater permits in May 2009 (see figure 3).7

2. Expensive Financing. Private financing is far

more expensive than public financing (see figure 2).
From 2000 to 2008, even the best-rated corporate bond
was 24 percent more expensive than a typical municipal
bond issued in the state, and 184 percent more expensive
than loans from Florida’s State Revolving Fund programs.5
Tampa Bay (water). In 2002, Tampa Bay Water
bought out Poseidon Resources and took ownership
over its desalination project in order to reduce fi-
nancing costs. Tampa Bay Water was a well-regarded
utility with a high bond rating, so it could sell bonds
with low interest rates.6
4. High Operating and Construction
Costs. Public control is a better deal for the ratepayer
and the taxpayer.
Citrus County (water and sewer). In 2009, in or-
der to save money during the economic slump, Citrus
County decided to have public employees take over
the operation of eight water plants and four wastewa-
ter plants that Severn Trent Services had managed.8
Tampa Bay (water). In 1999, Tampa Bay Water
awarded a contract to an engineering firm and Posei-
don Resources to build and begin operating a desali-
 Figure 2: Comparison of the Average Interest Rates on
Florida’s State Revolving Fund Loans, Municipal Bonds in
Florida and Corporate Bonds Nationwide, 2000 to 2008
8%
7%
6.1%
6%
5% 4.9%
4%
3% 3.0%
2%
1.3%
1%
0 Interest Rate of Clean Water SRF Assistance, by State.” October 10, 2008;
Florida Clean Florida Drinking Municipal Top-Rated
Water State Bonds in Corporate Bonds Corporate Bonds
Water State
Revolving Fund Revolving Fund Florida Nationwide
(Moody’s Aaa) (Moody’s Baa)
Note: Municipal bond rate is the market interest rate based on Bond Buyer
Index for 20-year general obligation (GO) bonds rated Moody’s Aa issued in
Florida. Corporate bond rate is Moody’s yield on seasoned corporate bonds
— all industries, rated Aaa and Baa
nation plant by January 2003.9 At the end of 2007,
after the public agency bought out the private owner,
the plant finally began supplying water at capacity.
It was nearly five years late and $40 million over
budget, and water costs were 62 percent greater than
originally projected.10
5. Bad Service. Service problems have plagued
many cities and towns whose water or sewer service is
privately controlled.
Chuluota (water). Since January 2006, Aqua Utili-
ties Florida’s Chuluota water system contained tri-
halomethanes, a suspected carcinogen, at levels that
violated federal water quality standards. In January
2007, Florida’s Division of Environmental Protection
ordered the corporation to reduce the amount of the
contaminant in the water, but at the end of 2008,
despite equipment upgrades, average levels remained
too high.11
Lee County (water and sewer). In 2000, after
five years of private control of their water and sewer
systems, Lee County decided against renewing its
contract with Severn Trent Environmental Services.
The county’s utilities director issued a memo with 21
pages of problems and estimated that it would take
more than $8 million to restore the poorly main-
tained systems to the condition that they were in
prior to privatization.12
The Solution: Public Money for
Public Utilities
Local governments should keep their water and sewer ser-
vices in public hands and reject privatization. Instead of al-
lowing irresponsible private control of our water, we need
to plan ahead for future generations and create a dedicated
source of public funding so that communities across the
country can keep their water clean, safe and affordable.
A federal Clean Water Trust Fund for water and sewer
systems would realize this goal and take the burden of re-
juvenating our water infrastructure off state and munici-
pal coffers. To maximize the public benefit and to protect
taxpayers and ratepayers, this money should be available
only to public entities and public projects. Florida needs
a federal trust fund to ensure safe and sound water and
wastewater systems now and for future generations.
7.1%
End Notes
1 Florida Statutes, §373.016 (2008).
2 South Florida Water Management District. “2008 Monthly Water & Sewer
Rates.” July 2008 at 2 and 4; Florida Public Service Commission. “Com-
parative Rate Statistics.” December 31, 2008 at D-4 to D-16.
3 Florida Public Service Commission. “Special Report.” September 2008 at 1.
4 Florida Public Service Commission. “Vote Sheet.” (Docket No. 080121-WS
). March 25, 2009 at 1 to 3; Florida Public Service Commission. Division of
Economic Regulation and Office of the General Counsel. “3/25/09 – Spe-
cial Agenda – Post-Hearing Decision.” (Docket No. 080121-WS). March 18,
2009 at 23 to 104.
5 U.S. Environmental Protection Agency, Office of Water. “Weighted Average
Medium-Grade
U.S. Environmental Protection Agency, Office of Water. “Interest Rates for
Nationwide Drinking Water SRF Assistance, by State.” October 10, 2008; The Federal
Reserve Board. Data Download Program. Available at www.federalreserve.
gov, accessed January 26, 2009.
6 Stockfisch, Jerome R. and Neil Johnson. “Obstacles swamp desalination
plant.” The Tampa Tribune. October 19, 2003.
7 U.S. Environmental Protection Agency. Enforcement and Compliance
History Online. Available at www.epa-echo.gov, accessed May 4, 2009;
contract operations may be incomplete, compiled from corporate press
releases, on file with Food & Water Watch.
8 Douglas, Robby. “Four county utility workers laid off; economy blamed.”
Citrus Daily. February 2, 2009.
9 Heller, Jean. “Board agrees on builder for desal plant.” St. Petersburg
Times. July 20, 1999.
10 “Desalination: doing it right – Environmental, fiscal questions remain un-
answered.” Daytona Beach News-Journal. June 8, 2008; Salinero, Mike.
“Desalination plant OK’d to join system.” The Tampa Tribune. December
18, 2007; Pittman, Craig. “5 years late, 4M gallons short.” St. Petersburg
Times. January 26, 2008.
11 U.S. Environmental Protection Agency, Envirofacts Warehouse. Safe
Drinking Water Information System. Available at www.epa.gov/enviro/
html/sdwis/sdwis_query.html, accessed May 8, 2009; Dodson, Kimberly.
Florida Department of Environmental Protection. Testimony on Ap-
plication for increase in water and wastewater rates in Alachua, Brevard,
DeSoto, Highlands, Lake, Lee, Marion, Orange, Palm Beach, Pasco, Polk,
Putnam, Seminole, Sumter, Volusia, and Washington Counties by Aqua
Utilities Florida, Inc. Florida Public Service Commission. October 27,
2009; Jackson, Rachael. “Chuluota wins round in battle over water.” Or-
lando Sentinel. March 26, 2009.
12 Whitehead, Charlie. “Utilities’ boss: $8M in work not done.” Naples Daily
News. May 5, 2001; Association of Metropolitan Sewerage Agencies and
the association of Metropolitan Water Agencies. “Evaluating Privatization
II: An AMSA/AMWA Checklist.” 2002 at 28.
Figure 3: Portion of Major Municipal Sewage Treatment
Facilities with Alleged Current Significant Violations of
Their Wastewater Permits
35% 33.33%
30%
25%
24.75%
20%
15%
10%
5%
0
Note: Significant violations include effluent and reporting violations of
significant magnitude or duration to be a regulatory priority
For more information:
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Copyright © June 2009 Food & Water Watch