The Botetourt data center is bad news, and some people are quite appropriately upset. Let’s not, however, allow our anger to preclude a little education. Here we have an excellent case study of how government in these United States works.
When I learned that a decision of the Botetourt board of supervisors bid fair to drain dry Roanoke’s water supply, I wondered how one county could unilaterally make a decision for a public utility servicing multiple counties. Well, it can’t, but then it turns out that the Western Virginia Water Authority is not a public utility at all. Let’s take a tour through Title 15.2, Chapter 51 of the Code of Virginia, which authorizes these “authorities.”
We may pass over the two opening articles, but things get interesting in the third and fourth. In § 15.2-5114, for instance, we learn that water authorities exist as independent corporations for terms of 50 years. Moreover, these corporations can
“Enter into contracts with the federal government, the Commonwealth, the District of Columbia or any adjoining state or any agency or instrumentality thereof, any unit or any person…The power granted authorities under this chapter to enter into contracts with private entities includes the authority to enter into public-private partnerships.”
We’ll come back to this, but know that any time you read “public-private partnership” you’re about to get scammed (publicly subsidized, privately profitable).
In paragraph 10 of § 15.2-5114, we find that the Water Authority can charge fees for their services. Fair enough, but what do these fees cover? From § 15.2-5136:
“Such rates, fees and charges shall be so fixed and revised as to provide funds, with other funds available for such purposes, sufficient at all times (i) to pay the cost of maintaining, repairing and operating the system or systems, or facilities incident thereto, for which such bonds were issued, including reserves for such purposes and for replacement and depreciation and necessary extensions”
Makes sense, but let’s keep reading:
“(ii) to pay the principal of and the interest on the revenue bonds as they become due and reserves therefor, and (iii) to provide a margin of safety for making such payments.”
Ha! What you thought a public resource is a tradeable commodity, and you get to pay the interest! Your water converted into a negotiable instrument, pursuant to § 15.2-5125.
Recall that the authority can make contracts, i.e. sell water to anybody in the country. In § 15.2-5115 we learn that when an authority makes a contract, it
“shall be subject to such provisions, limitations or conditions as may be contained in the resolution of the authority authorizing revenue bonds of the authority or the provisions of any trust agreement securing such bonds…The provisions of the contract and of any ordinance or resolution of the governing body of a unit enacted pursuant thereto shall not be repealed so long as any of the revenue bonds issued under the authority of this chapter are outstanding and unpaid. The provisions of the contract, and of any ordinance or resolution enacted pursuant thereto, shall be for the benefit of the bondholders.”
That’s right, the Water Authority’s duty is not to the people of Roanoke, but to bondholders.
In short, our local governments give our water and real estate over to a corporation, which is free to sell it to anyone else it chooses, and can issue bonds—the interest of which the consumer is responsible for—owing a duty of care to the purchasers of those bonds, and not to the people to whom the water properly belongs. The opposition of the local population is irrelevant to this scheme. If this isn’t an invitation to corruption, then I’m a hamster.
Unfortunately, this is the standard operating procedure for most government in the United States. If you’d like to see how the trick is done, and for how long it’s been done, I’d encourage you to read Gustavus Myers’ 1910, three-volume History of the Great American Fortunes. Here’s a link to where you may purchase his books.
P.S. The SWVA Data Center Transparency Alliance seems to be doing a good job tracking this stuff.
I review the contracts between the parties to this project here.