So… I’m voting “Yes” in the wastewater referendum. I know. “Prairie Dog guy is voting against a P3, big effing surprise.” It’s a no-brainer so I wasn’t even planning to write this. But hey, the Leader Post thinks you care how their financial editor, Bruce Johnstone, is voting (spoilers: he’s voting No… who saw that coming?!?), so indulge me.
Maybe you’ve heard? Regina Water Watch put out a press release yesterday alleging polling clerks have offered inappropriate instructions to some voters. Can’t say I’m surprised RWW’s saying this. Stories have been circulating for a while about problems with the advance and mail-in polls but getting confirming stories has been difficult so I’ve held off on writing anything.
But now that RWW has gone public with a press release I’ll report on that.
Never fear. Aidan Morgan was there with his motion picture machine and documented all the proceedings for your viewing enjoyment.
The first part is here and the rest are below the fold.
Ever have one of those days where you sit down planning to do a quick little project that you reckon will be fun and easy and won’t take up too much time and then the next thing you know… boom, you’ve blown, well, hours and your whole family is thinking maybe you’ve had a psychotic break because you’re swearing at your computer like it’s a poorly performing sports team or a politician?
That’s me today. I decided to whip up a quick infographic about the sewage plant because I’ve been having trouble wrapping my head around all the frickin’ numbers that have been flying around and I thought I could put together something that would be a handy reference for other stuff I’m writing and that might give me a sense of the scale of everything.
Well, I finished it. And I’m posting it below along with explanatory notes. And it’s huge so beware…
Greg posed a question a few posts back about the deal the city struck with Western Potash to use our grey water for some kind of extraction mining process. He was wondering what happens to the revenue that should come from that deal if we go ahead with a P3. Will the Sewage Consortium get that cash? It’s a good question. And related to that, by selling our water to Western Potash, will the specifications of the sewage treatment plant have to change and thereby put us in a position to run up extra costs with the Sewage Consortium?
I spoke with deputy city manager Brent Sjoberg a while back and he says that everything should be fine. The interview is after the jump…
Morina Rennie is a professor of accounting in the University of Regina’s Faculty of Business Administration. She researches public sector accounting, risk management, and private company auditing.
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There has been a lot of posturing on both sides of the Waste Water Treatment Plant (WWTP) upgrade issue with much contradictory information being bandied about. People I have talked to are having trouble knowing what and who to believe. I have been studying the publicly available information on this issue (from an accounting prof’s perspective) and I’m hoping I might be able to say a few helpful things in relatively plain language in this commentary.
The City relies primarily on a consultant’s report prepared by Deloitte LLP which carried out a Value for Money analysis on various approaches to upgrading the WWTP. The three finalists were the traditional public sector procurement model (Design-Bid-Build or DBB); the P3 model (Design-Build-Finance-Operate-Maintain or DBFOM); and a third hybrid option that is not on the referendum ballet. On the other side, Water Watch is relying on another consulting report, written by economist Hugh Mackenzie.
It seems that there are two main issues that have caused confusion:
I interviewed Maude Barlow, the national chairperson for the Council of Canadians, for our upcoming issue. She was in town to take part in a forum put on by Regina Water Watch concerning the upcoming wastewater referendum, and as we were putting together a list of questions about P3s and wastewater I figured she was a good person to turn to for answers.
I only used a few quotes from her in the final article so I’m posting the entire interview below…
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Prairie Dog: What would you say is the worst thing that could happen if the No side wins and the P3 goes through?
Maude Barlow: My guess is it’ll be revisited in five years because all over the world when municipalities are coming into contracts with public-private partnerships they’re questioning it within a few years. Everybody’s been talking about the immediate cost and the arguments been going back and forth. But what we have to remember is over the life of the 30-year contract, paying high water rates by the people of this city, that’s the cost, that’s the issue. And people have got to start to realize what looks like some free money — in this case from the federal government and in other cases the company itself puts the big investment in — once they’ve paid back their investment they’re free to rake in profits as long-term high water rates. And it’s not going to take people here very long to realize that that’s the case.
UPDATE: CJME has a good story on this morning’s press conference. Check it out. Here’s my original post.
There is an excellent, perhaps even can’t miss free event tonight for anyone who wants to be better informed about the Sept. 25 referendum on Regina’s
waste water sewage treatment plant at the University of Regina. Legendary Council Of Canadians national chairperson Maude Barlow, along with P3 expert Pierre Hamel and aquatic biochemist Marley Waiser will speak against the City Of Regina’s plan to use a private company to design, build and operate Regina’s next waste water treatment plant. These aren’t trade union stooges or dippy local hippies* — these are smart, world-class thinkers who you can bet will make a clear, coherent case against the City’s plan.
If you’re struggling to understand the issues, tonight’s event will offer the best possible articulation of the Yes side’s position.
The public forum starts at 7:00 p.m. at the University of Regina education auditorium. It’s free, and so is the parking. These things often end in Q&As, so I suspect there will be an excellent chance to have your specific questions answered. And, especially if you’re planning on voting for City Council’s plan, you owe it to yourself to hear the other side make their best arguments. Don’t you think?
*No offence to our beloved dippy-hippy friends.
The latest I’ve heard (last night at recreation program sign-up) is that the city clerk’s office has declared that for a Yes side win to be binding, they would need to capture 60 per cent of the vote and there would have to have been a 50 per cent voter turnout — an impossible threshold.
But that rumour is 100 per cent false.
I just spoke with Jim Nicol, executive director of governance, and he says some people may have read the provincial Referendum And Plebiscite Act and assumed it applies to the City of Regina. It doesn’t.¹
“Ours is a strict 50 per cent plus one [vote],” says Nicol.
And that means that if only 10,000 people show up to vote, the question of whether to P3 or not P3 could be decided by as few as 5,001 people.
You’ll recall how I interviewed Mayor Michael Fougere three weeks ago to talk about possible alternate sources of funding for the
waste water sewage plant project in the event that we can’t access P3 Canada Fund dollars because of a Yes side win.
Alternate sources like the new, soon-to-be replenished Building Canada Fund.
Fougere said the Building Canada wouldn’t work (read the article for a dissenting opinion on that) because the BCF that restarts after 2014 is a new fund and would require all projects be vetted for P3 viability.¹
Well, that got me wondering, why didn’t we access the old Building Canada Fund? I mean, here we are racing to get our
waste water sewage treatment plant built in time so our waste water sewage will comply with new federal water quality regulations — and we’re going to be cutting things seriously close. But it’s not like these water regulations are some kind of big surprise.
City council has been talking about upgrading our
waste water sewage treatment plant for a very long time. But we haven’t been actually getting it upgraded until just now.
I asked Mayor Fougere about why we’ve been so sluggish…
Prairie Dog: This sewage treatment plant project has been looming in the background at council for a long time. Almost as long as I’ve been covering city hall. Why didn’t we get funding secured for it three, four, five years ago when the Building Canada Fund was there? Why are we only getting this done now?
Mayor Fougere: I’ll have to go back and look at some of the reports and give me a chance to look at those to be clear on this one before I answer in detail. But it’s also we’re building up our own reserves because part of the funding is we were paying through the reserves as well and it was the timing to go forward. Building Canada wasn’t available at that time, I don’t think it was when you’re talking about it, unless we’re going back even further, that Building Canada wasn’t necessarily there at all. So it was when we’re ready to do it, when we felt we needed to do it and when we had the capacity to do the project.
PD: There were even other funds available at one time though. The Canada Saskatchewan Municipal Rural Infrastructure Fund,² for instance, that maybe we could have accessed seeing as we’ll be entering into agreements with rural municipalities [to use our waste water facility]. It’s almost as if we’re coming at this late in the game and now things are rushed.
MF: I don’t feel that way at all. I don’t think we’re rushed on this at all. We needed to get the work done so you can rewrite history I suppose and say we should do something different but we weren’t ready to do the project at the time. We were still designing the project, looking at the timing of that relative to other infrastructure needs, so I wouldn’t want to rewrite and say we should’ve done something differently because we weren’t ready to go then.
Maybe I’m not such a lazy toad, afterall.¹
I basically asked Sjoberg the same questions I asked the Mayor in that interview excerpt I posted yesterday. Sjoberg’s answers, though, were a little more… erm… comprehensive. (Interview clocks in at a whopping 3,000 words.)
So, as for why aren’t sewage treatment companies supporting the Yes side and trying to stop these P3s from happening, Sjoberg gave me a very detailed answer that ends with…
One of the factors is with P3s, they are a long term contract. And they are larger contracts. I mentioned in this case the P3 would not only be in construction but in the ongoing operations and maintenance. Instead of, to use the P3 numbers, instead of a $224 million project it’s a $760 million project over 30 years. That’s a big project. It’s attractive and that’s the business that they’re in. So usually they’re well versed on various different models and they do assessment of each project and determine that there’s something for them and that’s part of our process.
On the subject of how water rates will be set through the P3, I was under the impression that the waste water portion of the rate could fluctuate and so the private partner might be able to influence the rate over the lifespan of the project. Sjoberg says no.
What ends up happening under a P3 procurement and contract is the rates paid to the private consortium for operating and maintenance are determined in advance. For the duration of the 30 years. So that’s the I guess a little bit of the benefit of having a competitive process. So each of the consortiums are bidding on the project not only for the construction portion but they’re also bidding on it for the 30 year maintenance.
And as for what kind of reporting requirements will be on the private partner and what form they’ll take, Sjoberg explained it this way…
The contract that is structured with them has a whole level of performance requirements and reporting requirements. There’s compliance reviews and all kinds of work going on on a regular basis. At the administrative level they would be reporting to the city more often than they would be to council. I can’t say specifically if there’s a requirement for them to report to council. In any event the administration would do that as part of our regular process.
In the interest of providing maximum pre-referendum info-dumpage, I’m posting the entire interview below.
Hey Regina. How’re things? I’ve been on holidays. Sorry, booked them long before you decided to kick your autumn off with a “referendum.” Mind you, I left detailed instructions with our esteemed editor, S. Whitworth Esq., about stuff that needed covering on the
waste water sewage P3 vote but apparently he fukken ignored them.
In my absence, I hear Chad Novak has been scooping the hell out of us on the referendum front. I wouldn’t know. My first week of holiday was spent in the Narrow Hills without any access to the internet. I read a book. It was a great experience. These books they make out of paper nowadays are awesome. I predict they’re totally going to overtake laptops and iWhatsits as text readers. I can’t believe I used to do all my reading on a backlit screen.
Anyway, since I got back to civilization — such as it is — I’ve been doing the domestic bliss thing, paying exclusive attention to first days of Grade Two and waffle making. And as for the internet, if it was about something other than comic books, I didn’t read it.
Then the other day, our next door neighbour put up a “Vote Yes” sign on their lawn and I thought, “Ah shit, right. Referendum. I should write something about that.”
Fortunately, I had something in the can all ready to put on the web and here it is! An interview with our mayor, Michael Fougere about P3s, private companies and
profit margins returns on investment.
Twitter was all abuzz last night with tales of people receiving phone calls from a recorded Mayor Michael Fougere, entreating them to vote “No” in the upcoming waste water treatment plant P3 referendum. There was even a comment on the blog about it.
Of course, Fougere didn’t refer to it as a waste water treatment plant, the phrase is sewage treatment plant now.
I know this because I also received one of these automated calls. I found it a little off-putting because I’m actually expecting a call from the Mayor to interview him about the referendum. So when I picked up the phone and heard, “Hello, this is Mayor Michael Fougere.” I was like, “Oh, thanks for getting back to me.”
I was three quarters the way through my interview questions before I realized I was talking to a recording.
He also moved the question on the petition should be the same as the one used on the Regina Water petition.
A vote was held and the motion passed unanimously.
And that means we’re having a referendum in probably around eight weeks.
I think it’s safe to call this a big win for the people who came out to speak tonight and for all those who collected the 24,000 names on the RWW petition. And it also strikes me as a pretty daring move by Mayor Fougere.
With that, I’m going to bury myself under a blanket and write a story about this for the next issue of Prairie Dog. It comes out on Thursday.