Cities consider monetizing their utilities
April 29, 2010

A recent article in USA Today addresses the number of communities considering selling their water systems to private companies. It's a phenomenon that tends to follow the economic cycle; as communities find themselves facing budget difficulties, they are more likely to consider monetizing their assets by selling water and sewer systems to private ownership than when those utilities are flush with cash. Private suppliers of water have been a part of American utilities for as long as municipal suppliers; the Des Moines Water Works started in 1871 as a private company, and the Metropolitan Utilities District was formed in 1913 to succeed private operators that had been in service since 1889. A public-private hybrid model is also found with some frequency in our region, in which the city continues to own the infrastructure but a private firm operates the system on a contractual basis; Davenport, Sioux City, and Fort Dodge are among the larger cities here operating under such arrangements.

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last revised April 2010