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Eminent Domain Concerns Dominate Lexington Water Vote

Questions Posed to Voters in 11 States Could Affect Local Control of Water

 
Washington, DC - Popular sentiment against condemnation of private property for commercial development affected the results of a referendum on establishing public, local control of a water utility yesterday, explained Food & Water Watch.  Voters in 11 states considered restrictions to the government’s use of eminent domain that could have profound effects on efforts to restore local control of failing private water utilities.
 
 “Popular sentiment against the use of eminent domain by public-private partnerships is being used to put restrictions on citizens abilities to take control of their water infrastructure,” explained Food & Water Watch Executive Director Wenonah Hauter. “Development interests backed ballot initiatives in 11 states that would do far more than limit condemnation of private property for stadium deals and waterfront condo developments.”
 
The 2005 Supreme Court decision Kelo vs. New London, in which the Court approved government’s right to condemn private property for commercial development, gave birth to a popular movement against eminent domain.  While there are justifiable concerns about eminent domain, such proceedings are an important last resort for communities seeking to buy their water companies.  Proposals like California’s Proposition 90 would have made restoring local control of privatized utilities much more difficult and costly by requiring cities to purchase utilities at above-market rates.
 
At the same time ballot measures restricting eminent domain were approved in eight states and rejected in three, voters in Lexington, Kentucky considered whether to authorize the city council to take over their unpopular water utility, Kentucky American, a subsidiary of the German multinational RWE. The measure was the latest effort in a strong citizen campaign to establish local control.
 
 “The Lexington ballot measure went down in a backlash against government use of eminent domain,” said Hauter. “Eminent domain became a last resort when RWE made it clear that, while Kentucky American is for sale, it’s not for sale to Lexington.”
 
The local group, Bluegrass FLOW, was vastly outspent by a multinational conglomerate with an interest in preventing the parceling off of it's American Water holdings which it would prefer to sell intact on Wall Street next year. Kentucky American Water notified the Public Service Commission in 2004 that it planned to spend $2.71 million to influence city officials and defeat the local control movement.
 
Ballot measures restricting eminent domain passed Arizona, Florida, Georgia, Michigan, Nevada, North Dakota, Oregon and South Carolina.  Restrictions were rejected in California, Idaho, and Washington.