St. Joseph Should Privatize Its Sewer System
The usual problems with water in St. Joseph, Missouri relate to having too much of it all at once. But properly getting rid of the water you have used—through your sewer system—is also a complex issue. More stringent water quality requirements from state and federal regulators have made it more difficult for many municipal utilities to operate. Often, they simply do not have the resources to meet the higher water-quality and sewage-control standards. Even large cities have had trouble dealing with revised Environmental Protection Agency (EPA) sewage guidelines. For instance, Kansas City reached an agreement with the EPA in 2010 to upgrade its sewer system at a cost of $2.5 billion over 25 years, and cities like Kansas City have more resources to deal with sewer infrastructure than communities like St. Joseph.
Sewer rates in St. Joseph are already a matter of complaint. A June 2019 article in the News-Press detailed concerns among the area’s business community that high municipal sewer rates were harming the region’s economic environment. Whatever the price, St. Joseph’s sewer issues aren’t going away anytime soon. The city reached an agreement with the EPA to improve the sewer system years ago. During the Trump administration, the EPA gave St. Joseph additional time and flexibility to complete those required system improvements. Under that revised agreement, the city will be upgrading the system until at least 2036, and during that period will continue to periodically release untreated sewage into the Missouri River during major storm events. While the agreement and time extension with the EPA may be justified, the fact is that St. Joseph has another option to consider: privatization. Water in St. Joseph has long been provided by private utilities, and the city should once again—as it has previously—carefully consider privatizing its sewer system.
Indianapolis outsourced its sewer systems to private operators in 1994, and the cost savings were even greater than had been estimated. The city saved $72 million over the first five years of the contract, and those savings allowed the region to invest in major repairs to its aging sewer system. On a smaller scale, communities across Missouri have realized that the best thing for their residents is to privatize their water and sewer systems. Within just the past two years, voters in Bolivar, Eureka, Taos, Trimble, Purcell, Hallsville, and Garden City have approved privatization of their municipal water and/or sewer systems to either Missouri-American Water or Liberty Utilities. Those communities—mostly small towns spread around the state—realized that maintaining these systems was going to be an enormous burden on city governments not properly equipped to manage them. Privatizing them—for amounts ranging from $200,000 to $28 million—was a way for each city to guarantee proper operation of their water and sewer services by a regulated, privately-operated utility. The cities can use (and have used) the money to pay down debts, invest in other municipal needs, or do whatever the city wants to prioritize.
Arnold, Missouri, is probably the best guide for St. Joseph. Arnold, a suburb of St. Louis with approximately 21,000 residents, was having trouble keeping up its sewer system as it grew in population. In 2015, city voters approved a plan to sell its sewer system to Missouri-American Water for $13.2 million. Since that sale, Missouri-American has completed several promised system upgrades, while Arnold used the money to pay down municipal debt and expand its park system. As a larger city than Arnold, St. Joseph could expect substantially more money in any privatization effort.
Private utilities in Missouri are regulated. Just as Missouri-American Water cannot raise water rates in St. Joseph without approval from the public service commission, no private company could take over the sewers and raise rates further without going through the same approval process. The fact is that running a sewer system under current rules and regulations is expensive and beyond the capacity of many communities. However, it is well within the capacity of larger, private utilities like Missouri-American Water, Veolia, and Liberty Utilities. As the Indianapolis public works director said about the private contractors they hired to operate the sewer system, “It’s just a different league. These guys have resources our guys could only dream of.”
St. Joseph should take advantage of that expertise and seek bids from several private utilities to either outsource the management and operations of their sewer system or—better yet—purchase and operate it. That is the best way that city officials can address the sewer system needs of St. Joseph for the benefit of everyone in the community.