In American Towns, Private Profits From Public Works

[DonViejo]

In American Towns, Private Profits From Public Works

Desperate towns have turned to private equity firms to manage their waterworks. The deals bring much-needed upgrades, but can carry hefty price tags.

By DANIELLE IVORY, BEN PROTESS and GRIFF PALMERDEC. 24, 2016

BAYONNE, N.J. — Nicole Adamczyk’s drinking water used to slosh through a snarl of pipes dating from the Coolidge administration — a rusty, rickety symbol of the nation’s failing infrastructure.

So, in 2012, this blue-collar port city cut a deal with a Wall Street investment firm to manage its municipal waterworks.

Four years later, many of those crusty brown pipes have been replaced by shiny cobalt-blue ones, reflecting a broader infrastructure overhaul in Bayonne. But Ms. Adamczyk’s water and sewer bill has jumped so much that she is thinking about moving out of town.

“My reaction was, ‘Oh, so I guess I’m screwed now?’” said Ms. Adamczyk, an accountant and mother of two who received a quarterly bill for almost $500 this year. She’s not alone: Another resident’s bill jumped 5 percent, despite the household’s having used 11 percent less water.

more
http://www.nytimes.com/2016/12/24/business/dealbook/private-equity-water.html?emc=edit_ta_20161224&nlid=57435284&ref=cta&_r=0

[Auggie]

1. I believe privatization of all kinds is on the radar

We know about Social Security and Medicare, of course. But local level public works are enticing prey: easier to privatize with less oversight and more graft. It represents a huge growth category for profiteers.

[Historic NY]

2. When people say government should run like a business, they forget business needs to make a profit..

it happened in my town, from water to sewer depts... and even mowing grass. The jobs that once went to high school & college kids are now reduced to babysitting kids at (fee for service) summer camp. The old time guys who handled water and pass their knowledge down to new employees went out the door. Guys who work for the private operator come out to mark out pipes that don't exist, because the company charges for it. Companies will readily subcontract out excavation work for a cut. So basically, the taxpayers have surrendered their tax dollars to private companies. The town reduced its payroll, cut civil service jobs and got to make the budget look, like a shiny new penny.