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Santa Cruz Indymedia | Health, Housing, and Public Services

Felton Community Resists Water Giant
by Christina Aanestad
Monday Jun 18th, 2007 6:58 PM
Residents in the town of Felton, California are using eminent domain to buy back their water supply from a private water company called American Water. Residents complain of price gouging and poor customer service.
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The small community of Felton is going toe to toe with the nations largest private water compnay. American Water serves some 18 million customers in 29 states, including California, Pennsylvania, New York, Illinois, and Ohio. 82 year old Milton Nielsen lives on social security with his son in Felton, California. After a water pipe broke on his property he received a water bill for over 4,000 dollars.

"I got that bill and I almost fell over."

After complaining to American Water about his bill, they agreed to cut the bill in half, requiring Nielsen to pay over 2 thousand dollars for water he never used.

"I wouldn't ask them to give me a hand if I was dying of thirst in the desert. That's how crooked these people are."

Nielsen says his last water bill was 162 dollars, more than double what he paid before American Water bought the system in 2002. This steep increase is why the community of Felton has now voted overwhelmingly to buy their water system back.

But the company refuses to sell. Kevin Tilden, spokesperson for Cal Am Water,American Water's California division, says price increases are necessary to maintain the decades old water system.

"Water standards are changing, for water quality, the EPA standards are changing. There's some investment needed to keep up with that. But also our water systems are generally 40 to 100 years old and there's a certain amount of maintenance and replacement needed to keep them reliable and current."

Tilden says the company's prices are comparable to those in nearby water districts and actually lower than some, like the community of Davenport, where residential water bills are over a thousand dollars every year.

The San Lorenzo Valley Water District shares the same water source as Felton. Barbara Springer a member of Felton's FLOW, Friends of Locally Owned Water says SLV's water rates are half what she pays American Water.

"For 40 units for SLV water district you'd be paying about 118 dollars for two months. For Cal Am, we're paying about 275 dollars for the same amount of water."

The people of Felton plan to use eminent domain to buy back their water system BUT American Water has spent millions resisting. Springer says the rate increases are not going to pay for
maintenance, but to pay for American Water's corporate overhead.

"SLV water district is managed right here in the San Lorenzo Valley, that's it. Cal Am has a layer of management in Monterey California, a layer of management in New Jersey, they have another layer in Essen, Germany, so we're paying for all those multiple layers and significant private corporate salaries."

Felton isn't the only community to battle American Water. The city of Chicago waited months for broken fire hydrants to be fixed; and communities in Ohio fought back rate increases for brown tap water from American Water.

Victoria Kaplan of Food and Water Watch, says there's a conflict with private companies owning public resources like water.

"Private water companies are accountable to their share holders not the public they serve."

Last year, American Water's parent company, German based RWE announced it was selling American Water in order to focus on energy. But, Food and Water Watch released RWE board meeting minutes that show American Water has faulty infrastructure that would take over 200 years to replace and its outdated pipe system is leaking nearly 20 to 30% of water in New Jersey and Pennsylvania. Minutes also state that regulations on arsenic and mercury contamination are getting tougher to meet, suggesting that RWE is selling American Water to offload a potential liability. RWE declined to comment for this feature.

Kaplan says the Bush Administration's cuts in public services are accelerating water privatization.

"What this does is it puts communities that need to improve their water system in a position where they're searching for the funding to do so, that enables private corporations like American Water to get their foot in the door and make their argument for doing the job. But, private companies like American Water have not been able to get the job done and get the job done well."

That's why Food and Water Watch is working to introduce legislation to establish a federal water trust, that would finance the nations water system. Meanwhile, the community of Felton and American Water have their first eminent domain court hearing later this month. From Felton, California, I'm Christina Aanestad reporting For FSRN.

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by friends
Thursday Jun 21st, 2007 12:57 PM
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(photo: FLOW's Jim Mosher talks with supporters at the Public Utilities Commission.)

About Felton FLOW

Friends of Locally Owned Water (FLOW) grew out of a series of meetings held by Felton residents beginning in October 2002 to discuss the fate of the Felton water system.

Over the past two years the system - which had been run by Citizen's Utilities for more than four decades - was sold to American Water Works in New Jersey, which was bought by RWE Aktiengesellschaft - the third largest water company in the world - through its subsidiary, UK-based Thames Water. Shortly after buying the Felton system, RWE filed for a 74% rate increase.

After much research, we learned that a locally-owned, locally-managed water system could offer much lower rates,better service and protection of our natural resources than what was being proposed by RWE and its statewide subsidiary, California-American Water.

In the spring and summer of 2003, we collected signatures from almost 1,100 Felton residents - almost 80% of the number who voted in the last election - on a petition asking the County to help us acquire the water system. The County Board of Supervisors, led by Felton's representative Mark Stone, voted unanimously to support us and has worked with us since then to move us toward that goal.

To acquire the water system, we must vote to create a Mello-Roos district and approve a bond that will raise the money to pay RWE/Cal-Am. The bond will be paid back through property taxes paid by Felton residents who use the water system. (Well owners won't pay). Despite Cal-Am's claims, the increased property taxes will be more than offset by lower monthly water fees - particularly when compared against Cal-Am's current request for a 108% rate hike.

If successful, the Felton water system will become part of the San Lorenzo Valley Water District, which serves 5,700 residents in Boulder Creek, Brookdale, Ben Lomond and Scotts Valley. SLV customers pay 40% less per month than we do under Cal-Am right now – before the already approved 44% increase or the 108% increase Cal Am is now requesting.

Under local control, if you have a problem, the people who answer the phone will not be in some distant office in Illinois or Indiana, they will be here in San Lorenzo Valley. And the person doing the repair will not be based in Monterey County, they will live and work full time in our valley and report to a local board of directors. If we don’t like how the system is operating, we won’t have to petition the Public Utilities Commission for relief through a bureaucratic maze. The SLV water district board is accountable to us the voters in regularly scheduled, democratic elections. We will control our water and watershed, not a foreign company with distant investors and directors whose primary motivation is maximizing their company’s profits.

We believe that affordable water is a right, not a commodity. Local ownership with local accountability will keep it that way for everyone in the San Lorenzo Valley.
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(37:26 minutes)

On September 23, Felton FLOW (Friends of Locally Owned Water) organized a film screening of Thirst at the Rio Theater in Santa Cruz, CA. Thirst is a new documentary that examines community water conflicts on three continents. 'Thirst' demonstrates that popular opposition to the privatization of water ignites remarkable coalitions that cross partisan lines. When it comes to water, many people demand local control and fear the arrival of multinational corporations with large lobbying budgets and little local accountability.

Thirst also shows that the individual struggles of these communities raise the same profound questions: Is water a human right for all people? Or, is it a commodity to be bought, sold, and traded in a global marketplace?

After watching Thirst, a six speaker panel discussed water issues around the world with a focus on Felton, a rural community in the Santa Cruz mountains. For more information on Felton's struggle for community controlled water resources, visit FeltonFlow.org. Also visit ThirstTheMovie.org.