11/6/10

Last Tuesday nights Council Meeting and our new extreme rate increases of our water services requires our strongest consideration that it is time to privatize many of our city departments. In this presentation I ask your consideration only on our Water and Sewer Systems.

GOALS the city would be trying to reach:

1. Stabilize and reduce rates
2. Control when rates would change
3. Rapid Response to expansion needs
4. Generate cash up front (The company purchases our water and sewer system)
5. Sharing and simplifying the environmental risks
6. The right to inspect assets and review operations
7. Quick and less expensive conflict resolution
8. Lower and more stable rates to induce businesses to locate in Middletown
9. Resolution of State and Federal compliance orders by the provider of water and sewer management services
10. Free the city administration from the above matters and give them the time to devote to other matters needing their attention
11. The city can control the rate and circumstances under which it could increase the services
12. The service provider could be changed if performance was not adequate
13. Financial and environmental risks can be controlled by clear assignment of responsibilities
14. Quick resolution of conflicts

All of these goals and more are being met in cities across the country that have privatized their water and sewer systems.

OBJECTIONS the city is most likely to confront:

1. Public employees may be displaced and may not be compensated adequately.

   Answer: Generally the employees are kept and trained by the company. Because they are streamlining operations an employee or two may be displaced but the companies are professionals and general resolve those matters with adequate compensation or reassignment.

2. Can the city privatize and still retain control?

   Answer: Municipalities retain control through the service agreement. The city can even include the right to buy the system back at the end of the term of the agreement.

3. What if the company doesn’t meet the terms of agreement?

These are just some of the features and benefits of privatization of our water and treatment facilities. There are many more. I hope that all of you will participate in the discussion and exploration of this option for our city that is so in favor of the citizens. I beseech council to admit that this is the time to exercise this option and save us many dollars in this curent economy and bring more efficiency to city operations.

If this goes well than we should consider it for other departments. It has worked well in many other cities. Remember, the companies we privatize with, would handle all negotiations and agreements with employees, unions and government agencies and at less costs then the municipality is able to do so.

Paul Nagy