"Missouri water is easier to treat," he explains. "It's a gold mine."

As the Chain of Rocks Plant fades in the rearview mirror, he turns west toward the smaller Howard Bend facility, tucked away behind a hill on a cornfield in Chesterfield. Chain of Rocks treats about 240 million gallons a day; Howard Bend churns out roughly 120 million.

Unlike other municipalities that rely on aquifers or wells, or suffer in long periods without rain, St. Louis enjoys an abundant supply from the Mississippi and Missouri rivers at its back door. In 2012 the two treatment facilities collectively pumped 46.6 billion gallons of water to residents and businesses throughout the city and parts of the county.

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.

Ted agreed to take Riverfront Times on a driving tour of the city's water-treatment facilities after corresponding with the paper for weeks. He was the first in a string of water-division employees to reach out to RFT after it became clear that the city was poised to strike a deal with Veolia. None agreed to be named for fear of losing their jobs.

"I'm not a disgruntled employee," Ted insists. "I'm proud of what I do. But this is wrong, the way it's going down."

The water department — like the airport — is a self-sustaining enterprise that pays for itself. Historically, that has afforded St. Louis the luxury of relatively cheap water. The same is true today, even though rates have increased 50 percent since 2004. The few city residents whose water use is metered pay 25 percent less per gallon than their counterparts in the county. The vast majority of the city's residents — about 80,000 customers — pay a flat rate for their water that's even cheaper, based on the number of rooms ($3.76 each), and showers and baths ($12.35 each).

It's a low price for a great product. Just six years ago St. Louis earned the title of "Best Tasting City Water in America" at the 2007 U.S. Conference of Mayors. Ironically, perhaps, it was Veolia that wrote the city a $15,000 check for winning the award.

And while much is being made today about fiscal uncertainties at the water department, the issues it faced two years are no longer as dire. Since the summer of 2010, chemical costs dropped, revenue increased slightly, and the utility's costs remained roughly flat. Still, the mayor's office has concerns.

Slay's chief of staff, Jeff Rainford, says the utility's two facilities are too large for the city's population. Plus, he says, the cost of chemicals is volatile and could rise again, and the utility is still using crumbling infrastructure that will need to be replaced in the very near future.

"We think if we do nothing we will be in almost the same situation as before," Rainford says.

So for the past two and a half years the city has been searching for the right impartial third party to assess the water division and make it more efficient.

But impartiality was the furthest thing from Ted's mind the day he first noticed Veolia employees touring the plant.

"It's absolutely a sin to let them come in here," he says. "Everybody is on edge."

Former alderman Villa remembers when the calls started coming in the fall of 2010.

"I used to have water-division employees call me. They said, 'The rumor around here is Veolia is taking tours of our facilities, and they're going to buy the asset,'" he recalls. "The employees were fearful."

It seems likely that most of the initial paranoia stemmed from Veolia's reputation. The company is almost as old as the 178-year-old St. Louis Water Division itself, tracing its earliest roots to Napoleon III's initiative to bring the first water service to Paris. Today, it has become a multinational juggernaut that runs water, waste, energy and transportation services all over the world. It provides water services in 8,500 cities. In 2011 it reported $39.8 billion in revenue.

"We're number-one in the world," says Matt Demo, spokesperson for Veolia Waters North America from their U.S. headquarters in Chicago.

One of the things Veolia specializes in is turning public utilities into public-private hybrids. Veolia runs the operations for profit, but cities retain ownership of the asset. Until 2010 it ran the water department in Paris. Just last week it was awarded a 30-year contract to run the water system in Rialto, California.

Given that fact, it struck some as an odd coincidence that Veolia managers were spotted at the utility a mere three months after the publication of a study by the Show-Me Institute, the libertarian think tank run by multimillionaire political financier Rex Sinquefield. The paper, written by policy analyst David Stokes, makes an enthusiastic case for privatizing St. Louis' water utility.

"The Saint Louis Water Division can be described as a municipal utility that provides high-quality water at an affordable price to the people of Saint Louis," Stokes wrote. "It is also a valuable asset that could be auctioned to a private water utility, generating an enormous amount of money for the city and its taxpayers."

Villa says that when he followed up with the mayor's office, he was assured that the Veolia representatives were merely taking a tour. David Hunn of the St. Louis Post-Dispatch wrote a story saying as much, quoting from an e-mail Rainford sent to a water-division employee:

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