The Privatization of Our Water is a Bad Idea, as is Combining Districts

The Community Voices article in the April 15 edition of the Montecito Journal by Charles C. Read and Eileen White Read attempted to identify the motive for suggesting that the Montecito Water District (MWD) and Montecito Sanitary District (MSD) should merge. 

However, it reminded me of what someone told me several years ago. That person stated that they overheard a small group of people at the Birnam Wood Golf Club discussing the possibility of privatizing the operation of MWD and/or MSD.

For clarification, privatizing a district transfers its operations from public to private control. A quick search of how to define privatization is as follows: “Proponents of privatization believe that private operations more efficiently deliver goods or services than public due to free market competition. It is argued that over time this will lead to lower prices and improved services.”  

However, with water and sanitary districts, this philosophy is flawed because privatizing those services creates a monopoly rather than increased competition. Frequently it leads to permit violations and reduced levels of service without alleged cost reductions. 

As past Water Resources Manager for the city of Santa Barbara and General Manager of the Montecito Water District, the decisions that my staff and I made were intended to be in the long-term interest of our customers. We were not motivated by increasing a company’s profit, but by providing the best possible service for those we serve. If the Board of Directors of the MWD or MSD decide to privatize their operations, the focus changes from public service to profit, despite the privatizing company’s assurance that their primary focus continues to be the customer and the product.

This can be a lucrative venture for a private company, as, in effect, they are given a contract to be a monopoly. They then make decisions to maximize profits which can include reducing maintenance activities, eliminating employees, and selecting less expensive materials or equipment that has a shorter service life.

These decisions move through the accounting ledger down to the bottom line as profit. The goals of providing high quality, reliable service, and a product that meets and exceeds all permit requirements, is of lesser importance.

In the informal meeting I referenced earlier, privatizing the districts was represented as an economic opportunity with some benefit to those who contribute to electing a new slate of Directors. Perhaps there is no connection between that meeting and the large sums of money that were contributed to electing new majorities on both the MWD and MSD boards. However, usually in district elections, there are little or no contributions, and incumbents are normally re-elected unchallenged. Directors receive little financial compensation to serve on the board despite the fact that they invest significant time and effort in discharging their duties and responsibilities. 

My hope is that the new directors on both boards recognize that there is no benefit to combining the districts. MWD and MSD operate as individual legal entities under authority of the State of California. The permit for each agency is issued by a separate state agency and is distinct due to the nature of their business. Their employees are required to have education, experience, and be tested and certified for their respective disciplines which are very different in nature. Combining the districts is a bad idea with no perceived value.

If it ain’t broke — don’t fix it! 

Last, my personal observation of the MWD Board of Directors is that they are qualified, hard-working, and appear dedicated to serving Montecito and its water customers. I find it hard to believe that they would support combining the two districts or entertain the idea of privatization.