Council Wussed Out
It is really no wonder that this City is in such a mess in so many ways. Any business person who watched Council last night must have gagged!
The WUC website talks about "WATER MAIN REPLACEMENT. Water Main Replacement Levy is a 13% levy upon a customer's fixed meter & water consumption charge." Was the money used for the purposes for which it was taken from Windsorites--to replace water mains or not? That is the reason people got mad when they heard about "diversions!" Did rates increase abnormally high becuase money was not used for that purpose?
Not one of the Councillors asked the obvious question about how much WUC budgetted for new infrastructure and how much was spent. No one asked whether the levy was to generate additional funds for capital works and if so, was it used for operational purpose or capital purposes.
That was the simple issue that needed to be addressed to clarify everything that has been said and written over the past few days.
Councillors failed us, again by ignoring the issue! They let Eddie and the WUC Commissioners off the hook by an explanation that told us nothing other than we have a water main issue, something known for years.
There was such a love-in after the Mayor delivered his remarks on the WUC financial fiasco that I was waiting for the singing of Kumbaya to follow.
We got an explanation that does not satisfy or answer any of the questions but allows Councillors to wipe their collective brow and wuss out for another day. Why Councillor Junior, the Chair of the WUC was so relieved that we could spend a dollar a day (or $365 per year) so that we can be relieved when we flush our toilets.
Oh Councillor Halberstadt raised the possibility of an audit so that he can write something in his BLOG about it but did not press very hard to get one. I guess he knew he had no chance of getting the votes so why offend your colleagues or not even get a seconder and appear foolish. I am sure that he must be kicking himself now after the reference in today's Henderson column to Marra probably being the next mayor. Bill must be pleased too at the comment since he was so accommodating to Eddie at Council as well as the lead-off praiser of the Mayor.
Now the odd part about the Presentation is that Eddie neglected to talk about what the Acting General Manager Max Zalev discussed. I guess it was better to ignore what he said since it did not fit into what Eddie wanted to say. We received the Saturday Star explanation from Eddie and not the Friday "Funds Diversion" one or the A-channel News story.
Eddie said there was no Funds Diversion but that is not what his AGM said nor the Chair of the WUC. Eddie himself said (until the new story came out):
- "Money that was being raised for water main replacement was actually funding operation costs," Mayor Eddie Francis said Thursday."
HUH....isn't that diversion. In fact, Eddie admitted that the funds were placed in the General Revenues. Did you see him trace where the funds went as they left that account? Of course not, he could not do so. That is why he now says:
- "If this is what dollars are going to be established for, this is where the dollars will have to go."
A big point was made that 3 times the amount of money was spent on Capital projects than came in from the levy. DUHHHH...Amounts were already budgetted in the WUC budget for replacement! That is why so much more was spent! There was no co-relation between amounts. The levy was to fund shortfalls.
What's this BS about "shooting the messenger." The problem of the water mains has ben known for years. That's why we had the extra levy. Eddie has told us nothing new or dramatic although it is being presented as such. In 2002, it was suggested:
- "Mayor Mike Hurst said it was time to look at ways to raise the necessary funds and suggested a water rate increase or a tax increase were not the only solutions. He said the city could look at a special capital levy to be used solely for watermain renewal and rehabilitation."
Here is what the Star said back in 2003:
- "The Windsor Utilities Commission has some good news and some bad news for their residential water customers.
First the bad news: The average homeowner can expect a levy of about $1.50 per month, or $18 annually, added to the water bill beginning today. Now the good news: there will be no increase in either consumption or fixed meter charges in 2003.
The five-per-cent capital levy will appear as a separate line on water bills. The money generated by the levy -- $1.2 million to $1.5 million per year -- will be used for replacement and improvements to Windsor's ailing water main system.
"We have to provide for the future," said Wayne Miller, chief engineer of the water division.
"Many of the (mains) will reach the end of their useful life within 10 or 20 years."
The need for a systematic replacement of the city's older water mains -- some of which are cast iron relics more than 100 years old -- is imperative, said Bill Prestanski, WUC marketing manager.
It is projected the program will extend over 40 or 50 years at a cost of $6.5 million annually. A total of $5 million was approved for the water main program in 2002.
Here is what the 2004 WUC Annual report said:
- "We continued to invest in our aging infrastructure.We spent a total of $10.75 million in 2004; $9.5 million in capital improvements for the distribution system...
Our capital expenditure program over the next 5 years is quite intensive. We are scheduled to spend approximately $40 million to improve our distribution system and water treatment facilities
...In January 2005, WUC initiated the development of a five-year business plan... This plan focuses on reliable delivery service, dependable water quality, infrastructure upgrades...
On November 26, 2003, the Commission approved an increase of the water main replacement levy from 5% to 13% to become effective January 1, 2004. This provided additional water revenues of $1.8 million...
The net income for the Commission in 2004 was $282,000, an improvement over the loss in 2003 of $48,000. The most significant factor was increased revenues from the water main replacement levy."
The point being made is that capital amounts had already been budgetted for capital projects as can be seen above. The levy was to generate additional funds needed. And it did. It was responsible for the net income of WUC improving from a loss to a profit but it seems not for the purpose intended.
Max Zalev (if he was the person on the A-channel news broadcast) admitted clearly that the levy funds on the water bills were used for operations. He said that, now, separate bank accounts would be set up and that levy charges will only be paid out for infrastructure capital charges and not for operations. That is diverting funds whatever else someone wants to say
Why didn't the Mayor address what Junior said in the Star story. He is the Chair after all and should know what he is saying:
- "Coun. Ken Lewenza, who is chairman of the Windsor Utilities Commission, said he didn't know how long the commission had been diverting funds.
Officials were vague on the details about why a designated fee would be used for other purposes, or whether doing so is illegal...
"I don't want to say I'm not concerned (about the practice). (The issue about whether the practice is fraud) hasn't been raised before. I would refer to legal on that question."
Lewenza said he understood the commission started diverting the funds to pay for overhead costs to avoid raising water rates. He suspected it's been a practice for several years and said it appeared politicians didn't want to raise rates, so utility administrators had to find money somewhere."
I guess that Eddie forgot to deal with the last part about politicians being responsible. I guess he does not like to admit that it was his fault. That changed from Thursday too it seems.
You remember his comment that numbers were picked out of the air for rates. I would think that WUC people ought to feel very offended by that. The AGM stated:
- "Despite the economic and political change impacting the water business, our Commission and Management have established a performance metric that is representative of being “best-inclass.” To achieve best-in-class status requires ranking among the top 10 water treatment and distribution organizations in the Province of Ontario in several key financial operating measures."
That hardly sounds like an amateurish organization.
- "Whiskey Tango Foxtrot" WHERE'S THE ISSUE (I had to clean up the language)
- Set up the Levy account so no more diversions
- No one went to Brazil with the money
- We have auditors already so who needs an investigation
- Who would set up an inquiry to investigate colleagues...there but for the grace of God go I!
So the crisis is over for Eddie and Council or is it? I heard about a group of people who met this weekend who have had enough. It was this event that was the catalyst to bring them all together. I wonder where it will lead. And guess where they met!