Testimony: CCM Cautions St. Louis on Contract for City Water Division

CCM Board Member Renee Marver presented the following testimony before the Public Utilities Committee of the St. Louis Board of Aldermen on Wednesday, July 2:

Good evening.  My name is Renee Marver.  I am a resident of the City of St. Louis and member of the Consumers Council of Missouri Board of Directors.

Consumers Council of Missouri is a statewide membership organization that focuses much of its advocacy on protecting utility consumers — consumers who deserve safe and adequate utility service at affordable and fair rates.  We represent the interests of individual consumers collectively, both in advocacy for public policy and in regulatory and legal actions.

We are pleased that the City of St. Louis is exploring ideas for achieving operational and economic efficiencies within its Water Division.  We are also pleased that the city is maximizing its options by seeking proposals from a variety of consulting sources.

However, other jurisdictions’ experiences with consulting services have provided some cautionary tales that have led us to pay close attention to the proposals you are reviewing tonight.  As you consider what is in the best interest of St. Louis water customers, we ask that you keep in mind the following principles of good government and public service:

1.     Paramount among the Consumers Council’s concerns is that the city not go down a path that would make the Water Division less responsive to the public.  St. Louis currently enjoys water quality that is of high quality.
To ensure that this level of quality is maintained, we hope that the city and its elected representatives will continue to be ultimately responsible for water quality, including treatment and testing.
Equally important is that the city continue to be ultimately responsible for setting the water rates that are paid by city residents.
The city should be wary of any contract that defers sits operational or rate-setting responsibilities to an unregulated and unelected entity.

2.      Seeking competitive bids is a good government practice for consultants, contractors and sub-contractors.  We urge the city to insist on this practice and to reject consulting proposals that do not employ this practice.

3.       One of the positive aspects of a municipal water system is that the utility rate structure does not contain private profits.  The city should ensure that its residents receive the economic benefit of future operational cost savings and that such savings not disappear into the coffers of a private entity.

In addition, please be wary of incentives or “shared savings” arrangements that unfairly divert too much of such savings away from the St. Louisans whom you serve.

Thank you for the opportunity to make these comments.  Consumers Council of Missouri will follow this issue with great interest.  We stand ready to assist in any way our expertise as consumer advocates may allow.

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