In what amounts to a $1-billion leap of faith, city councillors are being asked to wind down Winnipeg's water and waste department before senior city officials figure out precisely what role private engineering firms will play in a proposed city-owned utility.

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This article was published 7/7/2009 (4536 days ago), so information in it may no longer be current.

In what amounts to a $1-billion leap of faith, city councillors are being asked to wind down Winnipeg's water and waste department before senior city officials figure out precisely what role private engineering firms will play in a proposed city-owned utility.

On July 22, council will vote on a plan to create a new arm's-length corporation that would assume control of water, sewer, garbage and recycling services and negotiate service-delivery agreements with neighbouring municipalities.

When the plan was first unveiled in 2008, a key component was a "strategic partnership" that could see the city hook up with a private engineering firm that would help Winnipeg make $615 million worth of waste water-treatment upgrades and possibly replace about $400 million worth of outmoded sewers.

The motivation for the private partnership is to allow the city to avoid the sort of cost overruns that plagued its new $300 million water-treatment plant, which went $95 million over budget, and the $47-million West End Water Pollution Control Centre upgrade that ballooned over its initial cost projections by $21 million.

Winnipeg chief administrative officer Glen Laubenstein, utility project leader Bryan Gray and Mayor Sam Katz all believe private engineering firms will be motivated to keep their costs down if they assume some of the responsibility for the future upgrades.

But two weeks before the council vote, Laubenstein and Gray are now downplaying the importance of the private partnership that has yet to be fully fleshed out in the grand scheme of the utility plan.

"We have the utility pretty much nailed. We're still exploring options regarding the strategic partner," Laubenstein said following a Tuesday meeting with the Free Press editorial board.

The city is mulling three partnership options, none of which would allow any private company to own all or part of any city facilities. But private firms could wind up with up to 49 per cent of a new subsidiary created to design and build the upgrades -- and that has unions and activist groups up in arms.

"Most of this stuff is just conjecture about what might happen down the road as a reaction to an opportunity we haven't even been presented with yet," said Laubenstein, who suggested the precise details of the "strategic partnership" are less important than the broad strokes of the utility plan.

An arm's-length utility controlled by board of directors would be more innovative than Winnipeg's council-controlled water and waste department, Laubenstein said. Without council scrutiny, Winnipeg could complete its ongoing $1.8 billion waste-water upgrade more quickly, he added.

The utility must be approved as soon as possible to allow Winnipeg to meet the deadlines imposed set by the provincial Clean Environment Commission when it ordered the city to upgrade its sewage system, the CAO added.

Council is poised to give the utility the go-ahead two weeks from today, against the objections of its left-leaning minority.

"Clearly, there are a huge number of unanswered questions. Councillors as well as the public need to know what they're voting on," said Fort Rouge Coun. Jenny Gerbasi, who has accused Katz and Laubenstein of trying to ram the complex plan through city hall.

"This is being rushed through in July without any clear sense of where it's going," she said. "At this point, we have a runaway train that's full of chaos. We need to slow down and take a look at it."

But city council frequently approves complex plans without sifting through all the fine details, said Laubenstein, suggesting all councillors need to concern themselves with is the general idea of a city-owned utility.

"That's the only thing council is expected to vote on," he said.

What city's proposed utility will do:

Separate water treatment, waste-water treatment and possibly garbage and recycling services from the rest of the city budget. Citizens already pay for water and waste water separately from their property tax bills.

Place water and sewer rate increases in the hands of the provincial Public Utilities Board, instead of leaving the decision with city councillors.


What utility might do:

Enter into a "strategic partnership" with a private engineering firm or consortium to design, build and possibly maintain a $400 million upgrade to Winnipeg's North End Water Pollution Control Centre, a $205 million component of the South End plant and a $10 million component of the West End plant. The private partner could own as much as 49 per cent of a new service-delivery subsidiary that would conduct this work.

If the above plans go well, continue that partnership to complete the $400 million job of replacing combined sewers with dedicated runoff and sewer pipes.

Consider the sale of water, water treatment and certification/training services to neighbouring municipalities, such as West St. Paul or Springfield.

Consider the creation of alternative energy subsidiaries that could build methane power plants, windmills and explore solar, biomass and geothermal energy.


What utility would not do:

Add PST and GST to water-and-sewer bills, pending provincial and federal approval.

Sell city-owned facilities, such as water and waste water plants. The service-delivery subsidiary

Bottle water from the city's new $300-million treatment plant and sell it at supermarkets.


What approvals does utility need?

Executive policy committee votes on the plan on July 15. City council as a whole considers it on July 22.