No WUC Rate Increase
I'm probably looking a gift horse in the mouth and am going to jinx everything but I'm very confused about what is going on at the Windsor Utilities Commission. Or in this case, what is not going on.
I'm not sure if you should be thanking WeACT or not for this. On Councillor Halberstadt's BLOG, George M. Sandala, Chair, Audit & Finance Committee, Windsor Utilities Commission stated:
- "The Audit & Finance Committee has been conducting open public meetings for the entire budgeting process and the focus/direction throughout has been very clear to all in attendance. At the February 14th open public meeting, the 2008 budget was finalized for recommendation to the Commission. It is a balanced budget with no rate increase recommended. This budget will be presented at the Commission’s April 10th open public meeting. Nothing was nor will be deliberated in camera.
As Commissioners we take our fiduciary obligations seriously and in discharging one of our responsibilities relative to “Duty of Care”, we have exercised great care, diligence and appropriate skill, acting with the view of the best interests for all stakeholders. We have strived to present a balanced budget in order to lessen rather than heighten the anxiety level of our ratepayers. Your comments appear to create a heightened anxiety level for our ratepayers by suggesting “. . . another rate increase is coming right up . . . “ I suggest your readers be enlightened on the facts from our open public meetings and I look forward to the clarification within your blog."
Seriously, does this make any sense to you at all!
On the one hand, we should be grateful that the rates are not going to be going up in 2008. On the other hand one can legitimately ask if this is nothing more than a political game to keep the rates low for fear of having a huge taxpayer backlash. I would suspect that the Mayor and other WUC Councillors were afraid that they might be run out of town if rates went up dramatically again.
But let's assume that what we are told last year was correct, that we have this huge need for money to pay for watermain replacement. If that is the case then why aren't the rates being increased as they probably should be. Is this political gamesmanship again, the same kind of silliness that the Mayor talked about that necessitated that huge increase previously. Remember he talked about politics that caused the problems of low rates but is politics going to cause new problems again down the road. Will we still have to pay the piper in the future, say about three years from now when Eddie is no longer the Mayor.
Remember how this was played out in the past with the blame game:
- "Defending an 86 per cent water rate increase, Francis has laid the blame on former commissioners, accusing them of playing politics by keeping a lid on rates even as the city's watermains deteriorated.Now, Francis says, WUC is forced to pick up the slack.
But WUC records from 1999 to 2007 show that commissioners did increase rates and that it was only after the utility came under the control of the city that a 31/2-year freeze on rates was imposed.
In May 2005, Francis told The Star he believed water rates were too high...
WUC records show water rate increases ceased when city council took control of the utility in February 2004. WUC administrators pleaded with commissioners to raise water rates in 2005, but WUC commissioners -- including Francis -- refused.
While councillors had been on the WUC board for a year by then, they argued they were still trying to understand WUC operations. It turned into a three-year learning curve -- commissioners didn't raise rates in 2006 either.
Coun. Alan Halberstadt says he believes the 86 per cent rate hike was delayed for political reasons.
"Here's the bottom line: I believe they delayed this increase until after the 2006 election," he said. "This is the first year of a four-year term."
I don't know about you but I'm pretty nervous about what is going on because I do not understand it. I went through my database and here's what I found:
- Windsor Star 07-26-2007
"The reasons cited for the Windsor increases are the crumbling pipes, years of maintenance neglect and the rehabilitation of the Lou Romano Wastewater Treatment plant. The backlog in infrastructure improvements plagues most North American cities, officials said.
Few municipalities have tackled the problem yet. Lewenza said Windsor is at the forefront of municipalities addressing infrastructure deficit.
The rate increases won't end in August. Water rates will rise again by $6 per month at some point in the future, Lewenza said." - Windsor Star 07-28-2007
Water bills contain three components: a fixed water meter charge, a charge for water consumption and a water main replacement levy, which is 13 per cent of the water charges. The water main and meter charges are increasing, but the rate charged for water consumption is staying the same. So reducing consumption will have little impact on the water bill, but it can help residents save money on the sewer bill, which is calculated as a percentage of the total water bill. The sewer rates are also increasing 47 per cent Aug. 1.
"There are no shortcuts when it comes to water," Zalev said.
The pending water rate increases are a stopgap measure to begin water main replacement work. The water utility plans to raise rates again by $6 per month in the future and managers want to revise the water rate structure so that residents have an incentive to cut back on water use, Zalev said." - Windsor Star 08-16-2007
An 86 per cent water rate hike will provide only three-quarters of what the Windsor Utilities Commission needs for its watermain replacement projects and more increases will be needed, according to a consultant's report released Wednesday.
The report says WUC will have to raise rates again in a year or two to fully fund projects. The rate increase could be as much as $100 per year.
"This is an interim report without a last chapter," said Gary Scandlan, associate director of Watson & Associates, which looked at the city's water infrastructure and developed a way to pay for replacing it.
"A $6 per month (additional increase) was an early number and is subject to change."
Board members have two choices regarding the next rate increase, Scandlan said.
The utility can issue debentures to keep water rates low initially, but rates would have to rise significantly in about 10 years to begin paying off the debt.
Or the utility can dramatically raise rates again soon and take out fewer debentures." - Windsor Star 12-18-2007
WUC work falls short despite rate increase
Despite last summer's increase, which angered ratepayers, Zalev said an additional rate hike "is something the community will have to deal with if we get to the (consultant) level...
WUC administrators are proposing a $48-million budget. To pay for all its expenses, controller Mark Friel gave commissioners a few options, including raising water rates, increasing the fixed meter charge, reducing capital spending or using the line of credit.
Despite increased water revenue from the 87-per-cent rate hike, the water portion of the budget is projected to be $2 million short because of rising costs. Water production expenses increased four per cent because of rising chemical costs, wage increases and needed plant maintenance.
The "managed services" fees WUC pays Enwin also shot up by almost $1 million, or 10 per cent. Enwin, the city-owned electricity utility that shares meter reading and billing services with WUC, charges the water utility $8.3 million for its share of the expenses. That cost is rising to $9.3 million, according to proposed budget documents. The fee skyrocketed because of increased wages and benefit costs."
I am even more confused now than I was before when this WUC fiasco first started. I don't know about you but if only we had a proper forensic audit or a value for money audit undertaken rather than the whitewash audit a lot of my confusion might have been cleared up. Instead, once this hits the traditional media, and WeACT gets involved, the farce will start all over again.
Don't these WUC people ever learn!
All I can see now is a need for money and yet no increases. I'm not against keeping rates steady or lowering them if required but if we are told that they have to be increased then why have they been frozen?
It is time for Councillor Marra to step up to the plate and demand a proper audit so we can get to the bottom of things.
posted by JoeBlog at 12:01 a.m.
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