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Winnipeg Free Press - PRINT EDITION

Debate about water utility not deep enough

Will greatly change service delivery

By: Bartley Kives

Posted: 07/6/2009 1:00 AM | Comments: 0 (including replies)

On a list of phrases that jump off the page and make readers pay immediate attention, "corporate utility" ranks down at the dreary bottom with "commodity prices" and "federal commission of inquiry."Thanks to its dull-as-dishwater name, the city's proposed utility -- an ambitious plan to replace the Water and Waste Department with an arm's-length corporation -- has not proven to be a hot-button issue in Winnipeg.

That's too bad because the proposal heading to city council on July 22 may result in drastic changes in the relationship between the city and its municipal neighbours and the ability for politicians to directly control water and waste services.

The plan on the table, which was only unveiled in detail to city councillors last week, calls for a new, quasi-independent entity -- a "quango," as they say in the U.K. -- to take over the responsibility for Winnipeg's water treatment, waste-water treatment and solid-waste disposal and maybe get into methane power and the production of other forms of green energy.

The new utility would get down to the long-delayed business of cutting city service-delivery deals with bedroom communities that can't afford to build sewage-treatment plants. It would also see city council hand over the responsibility for setting water and sewer rates to the provincial Public Utilities Board.

And more controversially, the utility would see the city get into financial bed with a private engineering firm to complete at least $605 million worth of waste-water upgrades at the North End and South End Water Pollution Control Centres.

For months, left-of-centre city councillors have wondered out loud why Winnipeg is bothering to pursue this utility when it appears most of the tasks it would take on could already be accomplished by the existing Water and Waste Department. Council's left-of-centre minority is naturally suspicious of a city-owned entity that strives to operate like a private business, based on the legitimate fear the interests of ordinary citizens might come second to bottom-line corporate pursuits.

Outside city hall, conspiracy theorists have posited even more nefarious motivations for the utility, suggesting Winnipeg may be poised to sell off Shoal Lake water -- an illegal practice in Manitoba -- or outright privatize water and waste services.

In reality, the motivations for the utility are simple. They have everything to do with money, plus a bit of intergovernmental back-scratching.

The province, for starters, is in love with the utility. Six years after forcing Winnipeg to engage in a $1.8-billion upgrade to waste-water treatment that the city can barely afford, the Doer government will soon be forced to order bedroom communities such as Stonewall and East and West St. Paul to make sewage upgrades of their own.

These orders will come with a need to fork over large sums of cash to municipalities already struggling with infrastructure deficits of their own. But the province can get off the hook if several sign sewage-treatment deals with Winnipeg, which will soon have the capacity to treat more liquid waste at its North End plant.

The same deal would also provide Winnipeg with more revenue to pay off its massive, multi-year upgrades, which have forced water and sewer bills to double over the past decade. But the city has another financial reason to embrace a utility.

In 2007, Mayor Sam Katz and several councillors were outraged when the tab for a West End Water Pollution Control Centre upgrade surged to $47 million from $26 million, partly because of design errors committed by a private engineering firm. Faced with the prospect of more than $600 million in additional upgrades, the politicians freaked out.

Since the city lacks the expertise to design and build state-of-the-art sewage-treatment plants, the administration has no choice but to rely on outside help. Down at city hall, some politicians and administrators believe the only way to ensure this help will care enough to prevent future cost overruns is to make them a part of the project.

Hence, a March 2009 call for "strategic partners" interested in completing the North End and South End upgrades, which netted 15 respondents, including some from outside Canada.

According to a request for qualifications issued by the city on June 16, whatever private company the city chooses as a partner will own between 40 and 49 per cent of the joint venture. It's difficult to reconcile that statement with previous city claims that Winnipeg will retain ownership of all its waste-water-treatment facilities if the utility goes ahead.

The complexity of this plan demands more scrutiny. If only there were a sexier word than "quango" to convince more Winnipeggers to pay attention.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 6, 2009 A6

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