'Why Privatize? We Can Run It Better!'

That’s the question United Electrical Workers Local 274 and the Office and Professional Employees (OPEIU) asked when their wastewater treatment plant was threatened with privatization....

“Why privatize? We can run it better!” That’s the question United Electrical Workers Local 274 and the Office and Professional Employees (OPEIU) asked when their wastewater treatment plant was threatened with privatization.

The city council—called a Selectboard—in Montague, Massachusetts, a town of 8,500 in the western part of the state, was concerned about the treatment plant because it had lost a large industrial customer. But the Selectboard never thought to ask the people who worked there what to do.

Instead, it solicited bids to privatize the plant in hopes of saving the town money. Soon four companies had handed in proposals, most of which promised big savings. Because of intense pressure from union members, none of the proposals called for layoffs or wage cuts (except, perhaps, cuts in management).

Montague has an unusual governance structure that allows for ample public input. Five elected Selectboard members meet weekly, and the town budget is voted on at representative town meetings of 150 people elected from precincts. The unions knew they had to take their case to the public.

PACK THE HOUSE

The Selectboard held public hearings on the proposal to privatize, and these hearings were broadcast live on the local cable TV station.

Union members made sure they packed the audience to hear the companies present their proposals on how they would run the facility.

But the companies never discussed how they would be paid. When the time came for questions, the unions immediately asked, “How much are you going to make for running the facility?”

After much beating around the bush, the largest company answered that it would receive 10 percent of the operating budget as its “fee.” Union members in the audience pointed out that this gave the companies the incentive to increase the budget instead of cutting costs.

Many of the Selectboard members thought that if the facility was privatized the company would assume all costs. Under intense questioning by the union, the companies admitted that the town would pay for repairs and replacement parts, such as generators and pumps.

This was the moment the unions were waiting for. They asked for time to create a proposal for more efficient ways to run the plant. The bosses, who had assured the Selectboard they had done everything possible to cut costs, were outraged.

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The fight against privatization must be made public and held in public—people support public facilities that they think are well-run.

The Selectboard agreed, their faith in privatization shaken by the disclosures of how the privatizers made their money, and by the looming costs for repairs.

THE UNION PLAN

For the next several weeks, the union members worked on their proposal. The only guideline: no wage, benefit, or job cuts. The workers voted to exclude management from the planning sessions because the plant manager was the person who had first proposed privatization.

Both UE members (who operated the plant) and OPEIU members (who handled the clerical work and laboratory testing) participated. Many of the proposals were ideas they had pushed management to try for many years. Workers made lists of their ideas, hashed through them in meetings, and threw away plenty.

The clerical workers wrote up the winning ideas in easy-to-understand language for the Selectboard and the public, who didn’t understand how the facility actually worked.

The result was a detailed report calling for higher usage and earnings by processing waste from other communities, and process and machine changes that would cut costs for maintenance, electricity, and chemicals.

For example, the privatizers claimed that since they were large corporations, they could buy chemicals in large quantities, and therefore more cheaply. Union members countered that Montague could join an existing consortium of small towns that bought chemicals together—and save thousands of dollars.

The workers’ plan was challenged, of course, by the privatizers at another televised hearing. The evidence, however, was overwhelming that union members had developed a cost-saving plan that did not involve wage or job cuts and that kept the facility on a non-profit basis.

In the end, one Selectman’s plea that “everyone knows big business runs things better” was greeted with chuckles, mockery, and a vote to keep the plant public.

SOME LESSONS LEARNED

• The fight against privatization must be made public and held in public—people support public facilities that they think are well-run. They don’t like overpaid bureaucrats and waste.
• Turn the focus back on management. Talk about eliminating or trimming executive salaries.
• Develop a union proposal on how money can be saved and efficiency improved without cutting jobs or pay. In Montague, workers consulted everyone from the electric company to the federal government and got useful advice.
• Look to the community. Churches and activists can turn out valuable help.
• Emphasize that privatizing a public service means adding a new and unacceptable cost: profit.

[David Cohen is a representative for the United Electrical Workers in Massachusetts.]