California Wants Private Firms to Get Share of Water Funds

Nonprofits and Public Agencies May Not be Only Ones to Benefit from Prop 50

When voters passed Proposition 50 two years ago, not-for-profit firms and public agencies were the only organizations that were to have access to the $3.4 million water bond.

But now California health officials are preparing to allow private firms to tap into the bond coffers, the L.A. Times reported.

State health officials who are drafting rules for dividing up the Proposition 50 money and are being heavily lobbied to make sure procedures allow private firms to compete for shares.

"We have a multifaceted water system in California that runs the gamut from public to private," said state Sen. Mike Machado (D-Linden), who heads the Senate Agriculture and Water Resources Committee. "So we have to try to deal with all aspects of it."

Officials at the state Department of Health Services say they are inclined to agree. Next week the department is expected to complete guidelines that will allow private companies to compete for $485 million in Proposition 50 money, the L.A. Times reported.

Machado said he would try to make sure the rest of the bond money was similarly available to investor-owned companies.

Proposition 509 was designed to protect, expand and clean California's water supplies and to preserve river parkways and wetlands. This bond, like previous water bond measures, were written so as to limit grants of the bond money to public agencies and nonprofit groups. Private companies can still get loans through a fund for safe drinking water.

"Water in California is enshrined in our state Constitution as a public trust," said Juliette Beck, coordinator of the "Water for All" campaign of Public Citizen, a national nonprofit consumer advocacy group. "We think it's imperative that public funds go to support public water systems and never end up in the coffers of multinationals or private companies, period."

Private water companies argue that their customers are taxpayers, too, and they should be entitled to the benefits of a statewide bond issue. Public agencies, on the other hand, contest that private firms often have the backing of large investers and that the bond money should be used solely to aid those agencies that do not have such backing.

The state health department's original draft guidelines on distributing Proposition 50 money banned private water company applications. But the agency reversed itself after private water firms – which have spent more than $800,000 on lobbying in 2003 and so far in 2004 – stated that the Proposition 50 language passed by voters did not unequivocally restrict the money to public agencies, the L.A. Times reported.

"Unless there's some specific section that prohibits the funding to go to private entities, since the private enterprises provide water to consumers and it improves water quality, our read of it is, it's acceptable," said Rufus Howell, assistant chief of the department's Division of Drinking Water and Environmental Management.

L.A. Times

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