A Business That Operates Like a Government

Let's go over the arguments for privatizing government services: Businesses are more customer-focused, efficient and free of political influence. If that's so, then somebody needs to tell United Water Services, which operates Atlanta's water system.

Since it took over in 1999, United Water has infuriated customers who complained about its unresponsiveness and lost a ton of money (accumulated debts so far: $47 million). Mayor Shirley Franklin was so concerned about the company's performance, she ordered several audits. Latest finding: One reason United Water is losing so much money is because it isn't collecting on overdue accounts.

Since 1999, the company has failed to collect $33 million owed to it. Together with what was owed to the city before 1999, the total amount in arrears is $57 million, more than what the company has lost so far. In one 20-month period, the company shut off water to only 15 overdue accounts.

Why such indifference to the bottom line? Company officials say the previous mayor, Bill Campbell, leaned on them not to pester the deadbeats. There was, one company official said, a "directive from the city . . . not to collect in some circumstances." He added, "We are very confident now that we have this new administration in place and it has requested we collect from everyone."

The affection isn't returned. "When we put the heat on, they improve," Mayor Franklin says. "I'm worried about a company that gets it right now but wasn't before." So much for efficiency: United Water is averaging 95 percent collections. When the city ran the system, government officials say, it collected 98 percent. Posted 1/15/2003

Postscript: Mayor Franklin took the contact away from United Water and returned the water department to city management. The city still runs Atlanta's water services.