A member of Baltimore City Council is imploring Pittsburgh residents to reject any attempts to privatize the Pittsburgh Water and Sewer Authority (PWSA).

But the reasons cited by Councilman Bill Henry are remarkable in that some of them actually indict the Baltimore system he claims to be superior.

In an Oct. 9 commentary in the Tribune-Review, Henry laments that when cities allow private corporations to take over public water utilities, “rates go up, wages and benefits for workers are cut and cities have less power to hold decision-makers accountable.”

“Water,” he maintains, “is a public good and human right.”

There have been some periphery discussions about the City of Pittsburgh and People’s Gas partnering to fix a PWSA badly broken by decades of political machinations. But city officials have been adamantly opposed to out-and-out privatization.

In Baltimore next month, voters will be asked to consider a ballot referendum that would ban such privatization efforts. “Baltimore will be the first city to ban the privatization of the public’s water,” Henry writes in the Trib op-ed. “Pittsburgh should be the second.”

Henry’s rationale?

“The purchase and operation of public water utilities by private corporations is often suggested as a solution to budget problems, aging water systems and increasing rates.

“Unfortunately, privatization tends to exacerbate these problems, not fix them,” he contends. “Low-income communities and communities of color suffer the most at the hands of ruthless corporate decision-making.”

Of course, in Pittsburgh, everyone “served” by the PWSA suffered – and will suffer well into the future — because of decades of mismanagement and corruption that allowed the water and sewer systems to rot.

Still, Henry argues that the kind of public-private partnership being bandied about with the PWSA-People’s coupling “is about asserting private interests over public goods and services.”

“When water is controlled by private interests, they put their revenue and the interests of their shareholders first. The rest of us come second, if at all,” Henry claims.

But this kind of “rationale” is all heat and no light. And Henry conveniently omits how Baltimore’s water system operates.

As veteran Baltimore reporter Mark Reutter noted, in an Aug. 6 analysis:

“Ironically, the (prospective) ban on privatization obscures the fact that Baltimore’s water and sewer system already operates much like a private entity with remarkably few checks and balances.”

Continued the much-needed point-of-order assessment:

“(Baltimore’s) municipal water policies are ostensibly intended to provide an essential service. But they’re also designed to capture maximum revenue to satisfy private bondholders and to fund capital projects determined by a relative handful of engineers and consultants.”

Reutter then goes on to explain how Baltimore’s water system works:

“Back in November 1978, city voters approved a charter amendment that designated municipal utility operations as ‘enterprise’ funds.

“The amendment removed the water and sewer systems from the annual budget process and required them to be financially self-sustaining.”

Furthermore:

“Ordinance 941, subsequently approved by the City Council, put a new mechanism in place for determining how much households and businesses would pay for water services.

“Rate determinations were placed in the hands of the Board of Estimates, and especially the director of Public Works, who sits on the spending board.

“If projected future costs outran projected future revenues, the board could raise rates at the recommendation of the Public Works director with the concurrence of the Finance director.

And if the enterprise funds encountered any revenue shortfalls, the Board of Estimates was required to establish new ratesat a level sufficient to recover any accumulated deficit, he notes.

And then there’s this, again from Reutter’s tutorial:

“In short, Baltimore’s water system became as profit-oriented as any private company (although, technically, it could not produce a profit, only a surplus.)”

In a nutshell, Reutter reminds that the government-controlled Baltimore system represents “a monopoly of hundreds of millions of gallons of water and thousands of miles of underground pipes free of any competition.”

The administrators of the water system are not required to justify their expenses and proposed rate hikes to state regulators.

By the way, they would be in any Pittsburgh public-private partnership or privatization scenario.

Reutter notes that the retail price of Baltimore’s water and sewer services remained flat for more than 20 years after the charter amendment and Ordinance 941 were approved.

“Then came a decade of reckoning,” he details.

It has nearly $3 billion in outstanding bonds for water and sewer improvements, many mandated by the federal EPA, with the bonds’ costs and interest coming “straight out of the pockets of ratepayers.”

Again, from Reutter’s in-depth analysis:

“Not surprising, then, the price of water and sewage in Baltimore City has more than doubled in the last 10 years and tripled since 1998. And there is no end in sight.” And water rates have risen in 17 of the last 19 years.

Reutter says that, in Baltimore, turning the issue of privatization into the bogeyman that it typically becomes “has also drowned out a rational discussion about how to finance costly infrastructure improvements.”

“And it’s put a damper on examining how well DPW is serving the public as opposed to fulfilling its obligations to bondholders.”

That is, the takeaway must be that privatization has become the proverbial strawman used to mask critical problems with continued monopoly control by government.

The headline on Reutter’s analysis? “Keeping Baltimore’s water system public won’t cure its accountability problems.”

Back to Bill Henry’s Trib op-ed:

The Baltimore councilman offers a straw argument all his own when he claims the Pittsburgh debate is all about “debt” when, in fact, it is about debt that must be incurred to rectify the failings of monopolist government machinations that came shockingly close to allowing the PWSA to collapse.

“Community control of public assets is critical to a healthy democracy and a healthy community,” Henry concludes. “The people and their elected representatives deserve to have a seat at the table and a say in what happens to their water.”

But when elected and/or appointed representatives run a water system into the ground, “the people” also should have every right to evaluate the privatization option.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).