Pennsylvania - Philadelphia - SYNAGRO - privatizing sewage plant a bad move ? Continuing to use union workers would have been less expensive ??
From:  Helane Shields (  
Sent: Fri 11/07/08 6:33 PM 
To:  a ( 

Friday, November 7, 2008 
Bad move: Privatizing sludge plant
Jeff Gilliam 
is business agent for AFSCME Local 394, representing city Water Department workers 

When Michael Nutter came looking for our union's support during the mayoral primary, 
he said he was opposed to privatizing city jobs.
But the biggest change he has made to city government so far has been to support privatization of
the city's sludge plant. 

Mayor Nutter and the City Council majority opted to let Houston-based Synagro take over 
the Water Department's Biosolids Recycling Center in Southwest Philadelphia, 
which handles treated solid human waste. 
The company had been lobbying for privatization for most of the last four years. 

The city may not feel the consequences of this bad decision for a number of years, 
but it's clear to us that the mayor has not lived up to his word to our union or to his reputation 
as a responsible fiscal steward. City Council also has abdicated its responsibility. 

Synagro, a subsidiary of the privately held Carlyle Group, has been accused of involvement 
in a developing scandal in Detroit. Published reports have said the FBI has been looking into 
whether company representatives bribed city officials while promoting a similar sludge privatization 
scheme in that city. 

When our local warned the mayor about these charges, he did launch an investigation of his own,
and his conclusion was that Synagro had not violated any laws in Philadelphia.
That is all well and good, but the mayor does not have the same investigative powers as federal authorities. 

Furthermore, the Synagro deal will not generate the advertised $100 million in savings over the next 25 years.
The city will be on the hook for the costs of this company's water, natural gas and electricity needs, 
which could range upward of $9 million a year. Those hidden charges will far outweigh the $4 million a year 
the deal is supposed to save. 

In addition, according to the contract terms, the city is responsible for paying Synagro
at least $23 million annually for the three to five years the company says it needs to build its facilities 
and get ready to handle the city's biosolids. And the company is already asking for increases. 

The cost for our Local 394 members to continue to do the job would be only $15 million to $18 million a year. 

Finally, if and when Synagro fails to turn a profit over the next 10 years,
the city is obligated to buy back the operation. 
Then it would have to re-create the technical expertise that the employees running the center have today. 

Our union continues to believe that this was a bad decision made with insufficient diligence
by a City Council and a mayor who were seduced by the prospect of saving money.
It's a mistake that Philadelphia's taxpayers and ratepayers will be regretting for years to come. 

E-mail Jeff Gilliam at 
Carlyle Group owns Synagro - BuzzFlash Perspectives - The Bush-Carlyle Group Archive 
"President George W. Bush's father works for Carlyle; so does former Defense Secretary Frank C. Carlucci, 
whose close friend Donald H. Rumsfeld now runs the ... - 22k - Cached - Similar pages - Note this