Checking Facts

STL_NewslettersChecking the Facts about the St. Louis Water Proposal

Accusations against Veolia fail to check basic facts

Veolia was recently selected for a consulting contract that would reduce the annual costs of the Water Division by up to 15% without layoffs, conserve water and reduce energy and chemical usage. That proposed consulting contract has been the focus of a misinformation campaign. Here is what the groups opposed to the contract are saying:

Claim: The region will face higher costs and risk lower water quality if the City approves the contract.

This statement is disproven by simply reading the overview of costs, drawn from St. Louis Annual Operating Plans from 2010-2013. The Water Division’s operating budget is currently unsustainable and dependent upon rate increases just to meet expenses – that doesn’t even take into consideration the need for capital investment to protect future water quality.

Not wanting to raise rates on St. Louis working families, Mayor Slay’s administration issued an RFP to find ways to optimize the system and reduce costs.

  • Get the Facts: Per our proposal, Veolia would work with employees to find ways to reduce costs at the St. Louis Water Division by up to 15% annually without layoffs. We would also work together to conserve water and reduce energy and chemical usage.

Claim: In Sauget, Ill. a Veolia subsidiary operated a hazardous waste incinerator for over 10 years without a clean air permit. As of 2008, the facility had been fined more than $3 million, mostly related to small explosions and the release of toxic chemicals, including carcinogenic dioxins, into the air.

This claim is completely untrue and has no support in the public record. The Sauget facility has had operating permits issued by the IL EPA at all times. EPA made an entry error in a database incorrectly attributing a $3 million fine, but that error was corrected. This correction has been a matter of the public record since last year.

  • Get the Facts: Veolia is in full compliance in Sauget. Our air emissions are well within requirements and we voluntarily accept pharmaceutical products so they don’t find their way into the public water supply. We’re doing great environmental work in Sauget, providing an environmental service that is necessary for our society.

Claim: Consultancy contracts like the one in St. Louis appear to be Veolia’s new modus operandi nationwide when direct privatization efforts are rebuffed and have served as a back-door avenue for outsourcing municipal operations.

Veolia is not proposing “privatization” in St. Louis, or anything close to it. Under the partnership model proposed to St. Louis, the city continues to own all assets and remains in full control of rate-setting. Veolia would simply be retained in a consulting role and a public workforce would be preserved. This information is a matter of the public record and is clearly-stated in Veolia’s publicly-available proposal.

For the record, Veolia only operates one asset that we actually own (“privatization”) in North America. This is in the city of Franklin, Ohio – which was part of an EPA pilot project in 1995 that Veolia was asked to participate in. Veolia’s core business is the public-private partnership model, which combines public-sector ownership and control with private-sector expertise in a scope determined by the municipal owner.

  • Get the Facts: This is not privatization. Any claim that states or tries to imply privatization is patently false.

Claim: In 2010, with infrastructure needs mounting and Veolia demanding more than the city could afford, Indianapolis canceled the contract more than 10 years early, for which they were forced to pay Veolia an additional $29 million. The nonprofit Citizens Energy Group took over, positioned to save the city more money than multinational Veolia was ever able to.

The facts in Indianapolis are quite simple. Indianapolis wanted to raise cash to address infrastructure issues. To do this, the city chose to sell its water and wastewater assets to a public trust entity, a transaction uniquely available to Indianapolis.

Both the city and Veolia understood conditions could change during the 20-year partnership, and provided for this possibility in the contract. As is standard in such agreements, the city merely compensated Veolia for its services and investment in terminating the agreement early.

  • Get the Facts: Veolia’s contract ended because Indianapolis wanted to sell its utility to raise cash to address infrastructure issues. The results of the Veolia-Indianapolis partnership were exemplary, greatly improving water quality and customer service, dramatically improving minority- and women-owned business participation, lowering operating costs (the city’s costs were lower throughout the nine year partnership than when Veolia assumed responsibility for operations), and the city became the first in the U.S. to receive both ISO 9001 and 14001 certification due directly to Veolia’s efforts.

Claim: Veolia is infamous for “environmentally hazardous activities”

The implication is false. Veolia Water is the world’s largest water services company, managing more than 8,500 water and wastewater facilities around the world, cleaning water and removing pollutants 24 hours a day, 365 days a week, and creating the technologies to advance environmental protection. No other company or city responsibly manages these levels of water treatment each day.   That’s our environmental record.

To be clear, in providing that level of environmental service across so many facilities, mechanical failures or human errors are inevitable, and we always move quickly to resolve any issues. Without accurate comparison data that shows Veolia’s record against other utilities, this accusation is meaningless and reveals more about the bias of the accuser than Veolia’s environmental record.

  • Get the Facts: Veolia’s contract renewal rate is consistently above 90%, our compliance with the U.S. Clean Water Act well exceeds 99%, our clients’ savings are in the hundreds of millions of dollars and our employee safety record is far better than both the municipal and private sectors. Our environmental record is best exemplified by the numerous awards we have received for our contract operations from clients and regulators. A partial list of these awards is available on our website.

There is nothing wrong with having dissenting opinions, and occasionally when making accusations, people make errors. But trustworthy organizations should check facts and data first – this is a basic responsibility of free speech. These accusations fail that test.

Veolia’s proposal to St. Louis would reduce annual operating costs by 15% without layoffs, would conserve water, and would reduce energy and chemical use. This is all a matter of the public record. This is the best option for St. Louis.