Is WUC Windsor's WATER-Gate

It's an old political cliché that can come back to haunt people:

• "It’s not the crime- it’s the cover up."

Do we have an element of this in the whole mess around water levy and sewage levy rates? Oh not that kind of a crime but has the effort of the last few days been designed to hide matters from the public? I'll let you be the judge after reading this BLOG!

There are several issues of concern that have arisen in the WUC financial fiasco that have to be addressed. They include:

1. Was there a diversion of water levy funds from capital to operating and for how long
   
   
2. If yes, when was the decision made to keep the the levy funds separate and to be used for the purposes for which users supposedly paid the money


3. If yes, why was the diversion needed


4. Did WUC pick numbers out of the air for watermain replacement costs and levy charges.


5. Who on Council knew about all of this and when


6. What should the consequences be

Eddie has no hesitation in attacking the period when Roy Battagello was Chair of the WUC and blaming the WUC management as the cause of the problems. Yet a year before at the State of the City speech, Eddie had praised Roy for his Riverfront views. You may not know that Roy was

• "elected in 1982 to the Windsor Utilities Commission. He was re-elected five more times before the commission was eliminated in 1998 and then served until earlier this year [2005] as chair of Windsor Utilities and Enwin Powerlines."

What troubles me is that no one from the Commission in the relevant time period seems to have been interviewed by the traditional media. What we have received so far is a one-sided explanation about what took place. Don't you find that strange? Is there not another side of the story or is it so open and shut?

Well, my moles have been active again. I received some materials that seem to be WUC documents. I want you to read the following:

September 16, 2002

Water Distribution Network-----Watermain Infrastructure Renewal Needs Report (Detailed 17 page Report)

2002 09 19
The attached report outlines the composition and estimated condition of the Windsor Water Distribution System and is for information and discussion purposes only…. A combination of rehabilitation, where prudent, and replacement will be necessary.

The attached report provides data outlining the construction history of our system, including the various materials used and when they were used along with the break history.

With this data, an assessment has been made of the renewal requirements for the next 50 years. The graphical representation of this data is known in the industry as the "Nessive Curve…"

In the worst-case situation, an annual expenditure of $7.2 million is required, while in the best case situation an annual capital expenditure of $5.6 million is required. The average expected annual expenditure based on these two extremes is $6.4 million.

WEDNESDAY, SEPTEMBER 25th, 2002

The Commission noted the Chief Engineer’s recommendation that until further studies can be completed the Commission should implement a proactive annual renewal program of at least $6.4 million as contained in the "Water Distribution Network Watermain Infrastructure Renewal Needs Report" circulated with the Agenda...

The Chief Engineer also explained a new product/process used instead replacement ageing watermains that entails cleaning the watermains and then applying epoxy to seal/repair the watermain thereby significantly extending the life of the watermain…He said the new process is estimated to reduce watermain replacement/repair costs by one-third and cause less system interruption and inconvenience to the customers.

2003 01 13

there is a need to begin the systematic replacement of the older cast iron water mains. This program is anticipated to extend over the next 45 to 50 years and will require rehabilitation or replacement of water mains with an annual cost of $6.5 million based on 2002 dollars...

It has been determined a new Capital Levy of 5% of each customers water bill will be required to provide the additional funding ($1.2 to $1.5 million) to allow this program to proceed.

JANUARY 22nd 2003

WATER RATE INCREASES

It was moved by M. Hurst second by D. Cassivi that:

a) a new Capital Levy of 5% of each customers water bill required to provide the additional funding ($1.2 to $1.5 million annually) to allow for capital improvements to infrastructure be confirmed
b) said levy be indicated as a separate line on customer bill;

The Commissioners noted that the capital levy funds can only be used solely and exclusively on watermain infrastructure.

2003 11 11

With the increasing capital spending on watermains required in the next thirty years there will continue to be a cashflow shortfall on the capital side of at least $4M…

As a model for determining rates in the future, there should be a split between the capital costs plus debenture repayment amounts, which should be financed through the WRL [Water Replacement Levy], and the operating costs which should be covered through the consumption, fixed and summer levy charges.

WEDNESDAY, NOVEMBER 26th 2003

It was moved by P. Carlesimo, seconded by B. Wood that the Commission:

a) increase the watermain replacement levy to 13% from the current 5% of the Consumption and Meter Fixed Charge (representing a 7.5% increase) which will increase the average residential bill by $1.90 per month;

The Interim General Manager confirmed that the consumption rate was not increased in 2003 and that monies raised through the watermain replacement levy will only be used to watermain infrastructure.

01/26/05 Agenda

The water main renewal program will proceed in 2005 with $6,500,000 budgeted comparable to the 2004 expenditure level.

2007/05/07

To: Chair and Commissioners of Windsor Utilities

For many years, water revenues have not been sufficient to cover all operating and capital costs incurred by WUC. Over the past decade, operating costs were recovered, but capital spending was below necessary replacement level and was not recovered in rates…This has resulted in a serious infrastructure deficit…

In 2004, the water main replacement levy was implemented. This levy was intended to be used for capital, but has been required to fund operations. From the effective date of the new rate increase, these funds will not be included as operating revenues and will be accounted for as a fund for capital contribution.

Were the first and last douments the "smoking guns?" Do they destroy the nice case that was built up and demonstrate that the first Star story and the A-Channel News story were correct after all? Is there some other reasonable explanation?

Obviously, I have not seen everything that the WUC has produced but just a selected number of documents. Unless there is contrary material, these documents make it clear that:

1. There was a diversion of water levy funds from capital to operating for a number of years since 2004 and that fact was known at least in May, 2007 by the Chair of the WUC and the Commissioners including the Mayor and Councillors Lewenza (the Chair), Jones and Marra. (I told you before about the 2004 Annual Report comment)



2. The decision had already been made to keep the money and accounts separate by the time the Mayor told us about it
   
   
3. When the levy was increased in 2003, the Commission stated that the funds could only be used for the watermains
   
   
   
4. In fact, the funds were used NOT for capital but to fund operations



5. The WUC had a report presented to it 5 years ago that was extremely detailed about the condition of the watermains and made decision on replacement costs based on information provided and NOT numbers pulled out of the air.

Frankly Eddie and certain Councillors owe citizens an explantion. What was said at Council seems to be inconsistent with the documents I have provided. I would like to know why other Councillors on the Commission did not tell us what happened.

Based on this material, the Province has no choice but to step in to determine what the true facts are! We seem to have two different stories and I, for one, do not know which is true. I would think also that those involved in WUC in the past should demand that the air be cleared as well for the sake of their reputation if for no other reason. They have been made to look incompetent to say the least.

If in fact, citizens have not been told the truth, then there is no alternative but resignation for those who have kept information from us!