As top executives with Illinois American Water filed into Rock Island City Hall Monday night to make their pitch to buy the city's water service and water treatment facilities, more than 50 of the city's public works employees, AFSCME Local 988 employees and residents marched outside in protest, demanding that the city retain ownership of their public utility.
Protesters marched in 90-degree heat carrying signs reading, "Stop the sale of our water and sewer," "Privatization does not serve the public interest," and "Just say NO to American Water."
Russell Thomas has been employed as a water plant operator for 14 out of the 33 years he's worked for the city.
"Our system is not broken," Thomas said. "We're trying to bring awareness to our citizens and businesses that this is the wrong way to go and this will destroy the city. The water utilities last year had $5 million surplus at the end of the year."
Sandy O'Neill has been a chemist with the water plant for 34 years.
"The possible sale of the water and sewer plant is a bad thing. The people of Rock Island should be able to decide this," O'Neill said. "It's a public utility, so it should go to a public vote and not be left to a handful of people on the city council. There have been many public utilities that have sold out and they regretted it. Rates have gone up, the service is poor and (the municipality) has lost control of it. Once you give it up, you lose all your future revenue."
State Rep. Mike Halpin, D-Rock Island, marched with the protesters.
"I'm trying to support the community," Halpin said. "I think privatizing a public good has never worked out for citizens. We need to try to maintain control here locally and make sure the city is accountable for any issues with the system."
Cages were first rattled Oct. 20, when Illinois American Water representatives gave Rock Island water plant employees a presentation and answered questions about what would happen if a deal goes through. AFSCME members were startled by their presence and responded with a press conference and a protest Nov. 19 in front of the city's water plant, 2215 16th Ave., saying if the city privatizes water service, residents will see their water and sewer bills increase dramatically.
During his campaign for re-election in March, Mayor Mike Thoms said he was not in favor of selling the city's water and sewer system because "the core (city) services are fire protection, police protection, water and sewer. And streets. That's the role of the city — to maintain those infrastructures."
But Thoms also said he was open to learning more about it.
"I am for investigating it," he said in March. "You've got to roll the rock over and see what you have."
On Monday, Thoms said if the city wanted to move forward, Illinois American Water would have to go through an RFP (request for proposal) process.
"To make an educated decision, you need pricing," Thoms said. "What are they willing to pay? To do that, you have to do an RFP."
Thoms said there also would be public meetings so city leaders could gather input from residents.
Inside City Hall, Illinois American Water representatives made their best case, noting the company currently provides service to more than 1.3 residents in 140 communities with 370,000 water and wastewater customers. They also appealed to AFSCME, saying the company is a strong union partner, with 18 collective bargaining agreements representing more than 60% of employees in Illinois.
"We seek to create awareness around the opportunity of a potential partnership to really change the trajectory of Rock Island," said Justin Ladner, president of Illinois American Water.
"We know there are challenges in play in terms of underfunded pensions for your police and firefighters," Ladner said. "Your property tax percentage is 49% and the debt is currently more than 400%. Growth of city debt has grown by 250% since 2011. What do these facts mean? It means there is a growing challenge for the city financially.
"We're here because we feel like there is a partnership opportunity to further explore a water and wastewater partnership with a regulated utility that may help stem this tide and reverse the trajectory, and do so in a way that's in the best interest of the city as well as the residents. We know the need is dire."
Eric Larson, senior manager of the Western Division for Illinois American Water, said all employees will keep their jobs and union contracts will be honored if the utility is privatized.
"Our team is our backbone in a partnership," Larson said.
During public comment, former 6th Ward Alderman Joshua Schipp spoke out against selling the water and sewer system.
"American Water is an impressively successful company," Schipp said. "Their stock started trading in 2008 at $21-something a share; today it closed around $166 (per share.) That's almost 700% growth since 2008. Regular quarterly dividends since 2013 to the tune of over $2 billion (were) returned to shareholders.
"The point is, the company operates to manage the cost and return profit to shareholders. The significant difference for a public utility is that the utility should operate solely at cost," Schipp said. "Water and sewer in the city of Rock Island are longstanding enterprise funds, which means that the customer pays the bill. I think the public needs to understand they've been paying the bill, whether it's to the city of Rock Island or American Water, and they will continue to pay the bill. They will pay the acquisition costs and they will pay for all future capital improvement projects. But will they pay just at cost or will they pay cost plus profit?
"The city of Rock Island has a long, 180-year history of governance in managing its utilities."
Rock Island resident Paul Inman also opposed the sale of the water and sewer system.
"I like it when we keep our profits at home with our city," Inman said. "This decision you're going to make, it's going to affect every man, woman and child in this city for the next 50 or more years.
"This decision should absolutely be made by a referendum vote by the people," Inman said, as members in the audience interrupted him with applause. "It's too big of a decision to be made by a group of councilmen who are here now, but may be gone in five or six years. But that decision will live on with all of us."