News > January 5, 2004

A Watershed Victory

Stockton citizens thwart utilities deal

By Brian Cook

Democracy claimed a rare victory over the forces of corporate privatization recently, when a Superior Court judge ruled on December 5 that the city of Stockton, California must void its 20-year, $600 million water services contract with OMI-Thames—a partnership between two giant, multinational corporations—and return its utilities to municipal control (see “Piping Mad,” March 17, 2003).

Judge Bob McNatt upheld his October 20 ruling that found “an abuse of discrection” in the Stockton City Council’s decision to rush into a privatization contract without first conducting an environmental impact review required by California state law. The lawsuit was brought against the city council by a group of environmental and consumer rights organizations, which included the Sierra Club and the Concerned Citizens Coalition of Stockton.

The court case was the latest in a series of battles between Stockton city officials and the Concerned Citizens Coalition over control of Stockton’s water and wastewater infrastructure. Indeed, city officials’ haste in signing the privatization deal was precipitated by a ballot referendum organized by the Citizens Coalition in October 2002 that allowed residents to vote on any public utilities contract worth more than $5 million. The referendum passed handily on March 4, 2003, but the city council made sure its deal with OMI-Thames was finalized two weeks beforehand.

Despite an independent think tank’s analysis that the city would actually lose money by privatizing its services, the city council has voted to appeal McNatt’s decision on technical grounds. Perhaps this is because, in its attempts to privatize, the council already has spent nearly $5 million in consultant and legal fees and severance settlements.

“It’s been a David and Goliath battle,” says Juliette Beck, an organizer at Public Citizen’s Water for All campaign, which coordinated efforts with the Concerned Citizens Coalition.”But it’s a real testament to the power of citizen action, and staying positive and staying organized and never giving up.”

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• Reader Comments

  One very small victory in a sea of defeats. I don’t know if I should laugh or cry.

  Posted by Carl Wernerhoff on Jan 7, 2004 at 6:43 PM

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