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Water woes: private companies raise the rates on those who can least afford it.

Rebecca Trujillo first learned that a multinational corporation had bought her local water system when she got a bill. Like other residents in Chualar, a community of farm workers in Salinas Valley, California, Trujillo was used to paying a monthly flat rate of $21 for water. But in October 2004, she got a bill for over $200. Worried that her pipes might be leaking, she dialed the customer service number, and a phone rang in Alton, Illinois. The voice on the other end of the line, she would later learn, belonged to an employee of RWE-Thames Water. Based in Germany, RWE-Thames is the third largest private water corporation in the world.

Over the past 10 years, multinational water companies like RWE-Thames have been on a buying spree of public water systems around the world. But residents and ratepayers have been protesting these private takeovers. From Uruguay to South Africa, and from Cochabamba, Bolivia to Stockton, California, water privatization has spurred massive protests, grassroots campaigns, lawsuits, constitutional amendments and electoral defeats. While most of these battles focus on attempts by multinationals to take over water systems of mid-sized and major cities, in California the threats of privatization are most acute precisely where they are least visible--in the small, rural communities of the state's vast agricultural valleys, where mostly low-income immigrants from Mexico and Central and South America live and work among the fields.

Many of these predominantly farm-working communities have long been excluded from the county and state services and funding that regularly flow to larger cities. This exclusion is a legacy of the racial segregation of farm laborers in California's heavily industrialized agricultural economy and has led to a seldom scrutinized injustice: farm workers who live in communities with decaying water pipes and wells are cut off from city and irrigation water projects and forced to drink water from aquifers contaminated with the waste and pesticides from industrial agriculture. This state of exclusion leaves farm-working communities vulnerable to the whims of county governments that would rather abandon their aging water systems and the communities that rely on them.

Where Water Costs More Than Milk

With a population of 1,444, Chualar is eight blocks long and two blocks wide, tucked between ploughed fields and California's oldest highway, US 101. On the western edge of town residents in the community's lone taqueria look out upon a rolling current of highway traffic. Two blocks to the east, on the other edge of town, children at the Chualar Elementary School play in the sand less than 10 feet from the long rows of broccoli and lettuce where their parents work seven months out of the year.

Household budgets in Chualar are typically tight. Most farm workers, like Trujillo, earn $280 a week for their work in the fields--work that is steady from April through October. During the late fall and winter months, they follow la corrida (the run), first to Huron, about 100 miles southeast in Fresno County, to catch the short lettuce season in October and November, and then down to Yuma, Arizona--known as the "winter lettuce capital of the world"--from December through March. Many families split up during la corrida, sometimes cutting their winter income in half so that their children can remain in school.

Trujillo and other Chualar residents could not afford to pay the water bills they received last October. After calling both the county and the water company, they learned that their excessively high bills were the result of a rate increase that RWE-Thames' subsidiary, California American Water, or Cal-Am, had worked out and had approved by the California Public Utilities Commission (PUC), which regulates private water companies. Even the local school was hit with a water bill for over $2,000. "Usually the school pays between $200 and $300," said Luz Rascon, the school's business manager. "This completely took us off budget." The school had to make immediate budget cuts by limiting all purchases of new supplies requested by teachers.

Pedro Jimenez, the broad-shouldered janitor at Chualar Union, received the highest bill of any family in town. "I got a bill for $800, that's more than what I pay throughout the whole year," he said. "They sent us a note saying that if we didn't pay the bill, they were going to cut off our water. That's not a good way to treat the community. I've lived here 30-something years, and I've never seen anything like this."

Trujillo adds, "I called the company to see if I could pay the bill in phases and they said, 'No.' So I said: 'I pay your bill and then not eat? Am I not going to buy food this week?' They're selling us a gallon of water for more than a gallon of milk. Would it be better then for us to bathe with milk? Can you believe it?"

Bias In The Bill Structure

In the past two years, Cal-Am has applied for rate increases for water systems stretching from Sacramento to Santa Cruz. Cal-Am and another water company, Poseidon Resources, have been actively lobbying the state legislature to grant private companies access to general obligation bond funds and pushing for state subsidies to build private desalination plants along the California coastline. Their goal is to sell desalinated ocean water to cities and developers.

When Cal-Am bought Chualar's water system from Monterey County in 2002, they filed an application with the PUC to put Chualar under the same water rates as another system Cal-Am had recently acquired, Hidden Hills. Cal-Am is advocating before the PUC to merge rates around Monterey and Sacramento, which they say is a step toward a policy of statewide water rates. Part of their argument is that such broad rate bases will enable them to buy small water systems, which they claim is more beneficial to the counties than to their shareholders.

Twenty miles west of Chualar, Hidden Hills is a community of million-dollar houses sprinkled across the stunning green hills of Carmel Valley. According to the 2000 Census, Hidden Hills is 90 percent white, with a median household income of more than $200,000--the highest bracket on the census form. The new rate structure in both Hidden Hills and Chualar was to be tiered; that is, the price would go up significantly as people used more water. Tiered rates are meant to "encourage conservation" but effectively punish people for high water use.

Throughout coastal and hillside Monterey County, in communities like Hidden Hills where homeowners conduct lavish landscaping, fill swimming pools or grow grass to feed their horses, water use is a major issue. "I've seen people use half a million gallons a month just to water their lawns and pay $2,000 to $3,000 a month in the summer," said Russell Hatch, a resident of Hidden Hills who administered both the Hidden Hills and the Chualar water systems under contract for Monterey County. "If your water bill is too high, it is probably because you are using too much outside," he said.


Residents in Hidden Hills did not seem too bothered by the new rate structure. Valenda West, whose house borders several stables and horse tracks, said that she had not noticed a rate increase in her water bill. "I don't have time for that," she said. "I just pay the bill."

In Chualar, people noticed. Nearly all of residents' water use occurs indoors, and few, if any, homeowners water the small lawns in front of their houses. In response to the high bills, they contacted their county supervisor, W.B. "Butch" Lindley, who helped organize a community meeting in mid-October at the Chualar Elementary School with the vice-president of Cal-Am, Steven Leonard. Lindley's office also invited Nick Sandoval, a community organizer who works with La Union del Pueblo Entero, or LUPE, a nonprofit organization founded by Cesar Chavez and still closely linked with the farm-worker movement.

"I listened to the discussion, and it became very apparent to me that the community was talking one language and the company was talking a very different language," said Sandoval who attended the meeting as an individual rather than as an organizer. "The community was saying, 'These rates are too high for us, this is unjust, we need this changed.' And Steven Leonard, the vice-president of Cal-Am, was saying, 'I'm sorry, this was our mistake, and our mistake was that we didn't communicate to you folks that there would be a rate change, and we're going to help you lower your bills in so far as teaching you how to conserve water.'"

Many left the meeting frustrated by unanswered questions and Cal-Am's insistence on talking about water conservation rather than the injustice of the rate structure. "In the meetings we had, many people complained," Trujillo recalled, but the company representatives ignored the complaints. "Steven Leonard said that his company was very private and very expensive. Well, the county didn't let us choose the company. It's like saying, 'You're going to buy this dress and wear it even if you don't like it or it doesn't fit.' This company was imposed on us. We didn't choose it."

Trujillo doesn't see only greed but also bias in these developments. "Why did the county sell Chualar's water and not that of Salinas or Carmel Valley?" she asked rhetorically. "Why didn't they take us into consideration? The county knows very well that we are a community of 90 percent Hispanics. They know our salaries, but they washed their hands of the problems with our water. Do you think something like this would happen in an Anglo-Saxon community? There they'd scream to high heavens and by the second day the county would be out there doing something for them. For me this is a form of discrimination."

And the discrimination continues once the company takes over, said Amy Vanderwarker, an organizer with the Environmental Justice Coalition for Water. Her evidence? The company's failure to engage the community in setting the rates, their distant call center in Illinois without bilingual Spanish-English customer service representatives and the narrow focus on conservation, all serve to exclude and exploit communities like Chualar.

Fields of Exclusion

The legacy of racial exclusion in what's known as California's "Ag-land" is almost never discussed in current policy debates over much needed rural community development. But these communities were excluded from the major state and federal water projects that re-route entire rivers over the course of hundreds of miles to irrigate fields of alfalfa and lettuce. Agriculture was the first major industry in California, and its much lauded $30 billion economy was built with cheap water and labor. The water came from subsidized dams and canals and the labor--from the systematic exploitation of recent immigrants--first from China, then Japan and finally Mexico and other parts of Latin America.

"A lot of communities started out as farm labor camps, and they grew, and one well wasn't enough anymore, and they weren't connected to a city with infrastructure," said Martha Guzman, a legislative advocate for California Rural Legal Assistance. Guzman worked for years with the farm labor movement, helping rural communities advocate for funding to improve their decaying wells and pipes. "There is a vacuum when it comes to addressing these communities' needs on the county and state levels," she said, noting that the priority for public funding for water projects goes to the greatest amount of people served, which time after time steers the money to the larger cities.

And water treatment, she explained, is one of the most pressing issues for farmworkers, many of whom cannot drink the water that flows through their taps due to heavy nitrate and arsenic contamination. While arsenic occurs naturally, nitrates come from the millions of pounds of fertilizers that are dumped every year over the fields. Some of California's most economically disadvantaged residents thus pay twice for water: their monthly bills to keep their showers, sinks and toilets on tap, and also bottled water for drinking and cooking.

And then there are the hidden costs. In Chualar, many residents buy bottled water. Yet others, like Trujillo, have also invested thousands of dollars to pay for house-wide filtration systems. "The water is no good, it leaves your skin dry," she said. "Most of us have filters for all the water in the house. The company guarantees that the water is good, but you can tell the difference between the houses that have filters and those that don't," she noted, explaining that the filtered water tastes better. About five years ago Trujillo became concerned about her water quality, noticing the dry skin and the fact that her white clothes were not getting clean. Now, farm workers like Trujillo almost always take bottled water out into the fields, and most parents, worried that their children will get sick, send them off to school with water bottles so that they do not have to drink from the fountains.

A Temporary Victory

Cal-Am seems to have assumed that the people of Chualar would either quietly pay up or leave. But the leaders of Chualar's Comite, a group of residents who meet regularly at the school to discuss community issues, decided to protest the rates after the second community meeting with Cal-Am in mid-November. They worked with Sandoval from LUPE, as well as organizers from the Environmental Justice Coalition for Water and Public Citizen, to build testimony for a December PUC hearing in San Francisco. Meeting in the school cafeteria, the Comite and over 30 residents talked through their experiences and needs and came up with four demands to take to the PUC. They wanted an immediate return to the $21 rate; an independent audit of Chualar's pipes to check for leaks; a local, bilingual customer service representative; and water quality tests at the tap.


Trujillo and four other Comite members then traveled to San Francisco to testify at the hearing last December. Trujillo said that she believed that the PUC commissioners were respectful of their concerns and complaints, but that Cal-Am obstinately tried to keep the focus on water conservation.

The PUC commissioners had moved testimony from Chualar residents to the front of the agenda, which was set to hear testimony on a Cal-Am rate case in Thousand Oaks in Ventura County. Members of the Comite had left Chualar before dawn in order to be in San Francisco for the 9:30 a.m. hearing and present their demands. Sandoval translated, capturing the direct urgency of their testimony in Spanish. The Comite members were eager to voice their demands,, feeling as if they had been denied that voice up until then. "We are all field workers," she told the PUC commissioners. "If we have to pay a water bill of $280, well, that's a week during which we can't eat." Such passionate testimony--which focused on the question of justice, technical fixes like new meters, and conserving showerheads--brought applause from the audience at the hearing as well as immediate public apologies from Cal-Am and the PUC commissioners. Both agreed that residents should only pay the previous $21 fee until a new rate structure could be worked out.

Cal-Am's Steven Leonard later admitted in a telephone interview that the entire rate structure itself was wrong, and Chualar and Hidden Hills should never have been put under the same tiered rates. He pinned the blame, however, on the PUC, saying that "they obviously missed the social fabric of the water system, and we found out about it in a very public and painful way." Fred Curry, chief of the PUC's Water Advisory Branch, who met with the community in Chualar and was present during the testimony, agreed that the rate structure had been wrong. "When [Cal-Am] applied Hidden Hills rates to Chualar, it was just a disconnect," he said. "It was a broad-brush approach applied where it shouldn't be applied. It was a totally inappropriate rate design." When asked about the increasing acquisition of rural water systems by private firms, Curry critiqued private companies like Cal-Am. He stated that water corporations were buying small water systems "on an opportunistic basis" to show increased revenues to traders and investors.

Defending Their Rights

In addition to the lower rate, Cal-Am agreed to conduct a water-use audit in Chualar, help fix leaks by paying to reinstall flapper valves in toilets and washers in faucets and do a cost-of-service study to determine a more reasonable rate for residents.

However, a few days after the PUC hearing, residents in Chualar said that they began to get calls from collection agencies working for Cal-Am. Jimenez, who received the $800 bill, said that he was threatened with a cut-off. Cal-Am sent him another bill for $300 in December. "That is still difficult for me," he said. "I sent a payment of $140. That's like three or four months of payments. That's a lot of money--what we earn in a week. They're really abusing people."

Cal-Am's spokesperson Terrie Prosper said that the company had notified all residents in Chualar in English and Spanish that they were only to pay the $21 monthly charge. "The computer may still be kicking out notices," she wrote in an email, "but they are not to be honored by the customers." But this response places the burden back on residents like Jimenez and the Chualar Elementary School who dutifully try to hold at bay the collections agents and threatened shut-offs.

Trujillo said she is determined to fight the rates. Members of the Comite have discussed how to pull together as a community to hire a lawyer to challenge the rates and possibly to look for a way to leave the company. "This has been good," she said, "in that it woke us up and led us to defend our rights."

John Gibler is a freelance writer and researcher with Public Citizen's Water for All campaign in Oakland, California.
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Title Annotation:California American Water Co.
Author:Gibler, John
Publication:Colorlines Magazine
Geographic Code:1U9CA
Date:Jun 22, 2005
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