Hosed: A plan to overhaul the St. Louis Water Division leaves the Slay administration all wet

Hosed: A plan to overhaul the St. Louis Water Division leaves the Slay administration all wet
Theo R. Welling
Kat Logan Smith, director of environmental policy for the Missouri Coalition for the Environment, at the Chain of Rocks Plant.

On June 7, 2010, a cadre of St. Louis officials arrived at city hall to try to pull the city's water department back from the brink of disaster. The group included top managers from the St. Louis Water Division, the head of the board of aldermen's Public Utilities Committee and the mayor's chief of staff. Also on hand, at their own request, were representatives from Anheuser-Busch InBev.

Though AB InBev had only acquired the latter half of its unwieldy name a year and a half earlier, Anheuser-Busch had a long working relationship with the public utility. It was symbiotic — the brewery was by far the department's biggest water customer, and A-B relied on the city to produce clean, tasty water for the base of its beer. Employees of the water department even characterized A-B as a "watchdog," eager to report to the city any irregularities it saw in the water that could affect not only its product, but also the drinking water for the people of St. Louis.

While the collaboration was friendly, the tone of the June 7 meeting was grim.

Mayor Slay and his challenger, Lewis Reed (far right), discussed Veolia during a January mayoral debate.
Theo R. Welling
Mayor Slay and his challenger, Lewis Reed (far right), discussed Veolia during a January mayoral debate.

"It was stated that the company holds the Water Division in very high regard for the quality of the product delivered and at a low tiered price compared to AB's other brewery locations," read a memo documenting the event. "That being said, AB was very concerned about the effect of a substantial rate increase on its budget for 2010."

The fiscal situation at the department was growing increasingly alarming. Like many public utilities all across the country, the economic crash of 2008 was punching huge, unanticipated holes in the budget. Revenue was on the decline, thanks to an overall shrinking city population coupled with customers abandoning their bills along with their underwater mortgages. At the same time, the cost of water-treatment chemicals had skyrocketed.

That winter, the division asked the board of aldermen's Public Utilities Committee to consider passing the third rate hike in as many years to make ends meet. Without it, expenses would have to be reduced by $5 million. The division could only make that happen with more than 100 layoffs.

By the spring, the division, along with the mayor and the board of aldermen, began work on a two-year plan with an initial rate increase of 21 percent and a second of 14 percent. A-B, having caught wind of the planned hikes, was not happy.

At the June meeting the beermaker suggested — both for the good of its bottom line and the residents of St. Louis — that the 2010 rate increase be lowered or even tabled in order to let A-B workers take a look at the books. The city agreed.

"They were offering to do it at no cost," recalls former alderman Matt Villa who sat in the meeting as the head of board's Public Utilities Committee. "So we said, 'Why not? Let's give it a try.'"

The brewery brass left promising to be in contact the next day with ideas.

While news of the rate increase made the papers that month, a key hiring decision by a Paris-based company named Veolia did not. Veolia signed with the firm of prominent St. Louis attorney John Temporiti, a power player known for lobbying hard on behalf of clients who need friendly political waters to do business in, such as developers, waste management companies and hotels.

Veolia's timing was at the very least fortuitous. While the two events — A-B's involvement and Temporiti's hire — seemed unrelated, each set off a chain of events that would culminate this past November when the city green-lit a controversial consulting contract with Veolia, the world's largest water-service company.

In an off-election year the deal may not have made a ripple. But in the fevered climate of campaign season, a wonky municipal matter has swelled into a politically charged fiasco. On one side of the debate over the contract is the Slay administration, which says the water division needs retooling to prevent some of the fiscal nightmares that are looming on the utility's horizon. On the other side are a hodgepodge of critics including Slay's political adversaries (most notably his mayoral challenger, Lewis Reed), employees of the water division, environmentalists and even the St. Louis Palestine Solidarity Committee. In the eyes of these detractors, Veolia is the last company on Earth that should oversee one of St. Louis' most prized assets.

As he faces a tough battle to dethrone Slay, Reed — who did not answer calls for comment — has been happy to take up the mantle of the city's water warrior.

"Why would we hire the worst performer in the U.S. to tell us how to take our water and make it better, even though right now we're the number-one tasting water in the country? I don't get it," he told the audience at a recent campaign event. "This is a very important issue. I'm asking everyone to stay tuned on this."

Late in the afternoon on the Martin Luther King Jr. holiday, the sky is easing into shades of amber that glint off of the surface of the sediment basins visible from the road at the Chain of Rocks Plant, about eleven miles north of downtown. The water lapping through the system is coming in from the Mississippi and Missouri rivers, which converge five miles north of the plant. "Ted," a water-division worker with decades under his belt, explains from behind the wheel of his truck that of the two-river cocktail, what St. Louisans drink is mainly Missouri River water.

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