Both investor-owned and public water systems provide good service to communities all over America. In general, private utilities tend to offer greater efficiency, transparency, and investment into the community:

  • Investor-owned systems operate more efficiently than their public counterparts and have lower operational costs. Privatization also offers economies of scale. Cal Am's parent company, American Water, provides essential services like water quality testing and customer service centers that cannot be reconstituted locally without significant cost increases.

  • Investor-owned utilities offer more public participation and oversight than government-run systems, contrary to popular belief. This is especially true when it comes to rates. Investor-owned utility rate requests undergo strict scrutiny from the California Public Utilities Commission. In contrast, local water boards in public systems can adjust rates in a single board meeting with minimal public input.

  • Investor-owned utilities pay taxes that go to local schools, roads and facilities. Investor-owned utilities also pay franchise fees to cities. Changing to a public utility means not only will those corporate taxes be lost, but additional taxes will have to be imposed to run the public utility.

However, a public buyout of the private utility in Monterey would entail enormous costs. Public ownership means communities bear the burden of having to finance improvement projects on their own. The Monterey Peninsula needs a replacement water supply, and if the system were to go public, the burden of financing this highly capital-intensive project would fall on the public water agency, which doesn't have the capital to pay such large bills and would likely put off necessary system improvements for years due to insufficient public funding. With all of the capital investment needed in the coming years, forcing a public buyout could cause an unprecedented water supply emergency.