Conference encourages local government officials to explore privatizing water and wastewater treatment

CNY Business Journal (1996+), Jun 10, 1996 by Wilson, Frederick

Cimons reiterated the governor's assertion that the primary obstacle to state privatization is the grant payback law for federal grants. Public and private facilities get different treatment, and the bureaucratic obstacles were dramatically illustrated in the two-year approval process for the Franklin-area privatization in Ohio. Some see privatization as dismantling the government and have jokingly compared it to selling the Statue of Liberty.

"The governors are working to raise the temperature on this issue," Cimons stated, and stressed that local officials must actively lobby to advance privatization for water and wastewater services if they are to deliver public services better and at a lower cost.

In considering the privatization option, where do local officials begin? John Buttarazzi, senior vice president for the Empire State Development Corporation in New York City, advised officials to identify all legal, federal, and state regulatory issues. They should hire financial experts to analyze their own finances correctly before addressing private bidders. RFPs (Requests for Proposals) should be explicit in their intentions and selection criteria to assure that respondents will be qualified bidders. Officials should communicate with bidders in pre-bid conferences and publications, and should address concerns of all stakeholders--employees, customers, utility associations, environmental groups, banks, developers, regulatory agencies, politicians, utility administrators--to ensure a "seamless transition" to privatization. In evaluating proposals, officials should ask for a detailed presentation with legal and financial advisors present. When a selection is made, officials negotiate the contract, handle the close, and monitor performance.

"Unless you try you will never know," Buttarazzi said to participants. "You can always reject all proposals. If you don't try, you will hold yourself hostage to the status quo."