It’s A Referendum

Fougere: “It was the right thing to do.”

by Paul Dechene

Mayor Fougere - photo by Darrol Hofmeister

It was late and the media scrum around Mayor Michael Fougere was breaking up but I still felt like I needed something to open this article with.

“One last question?” I asked.

“Are you going to pick on me any more in your paper?” That’s Fougere kidding around. I think. But kidding on the square.

“Oh probably. Yeah. But maybe not today,” I said.

I have to admit, it’d be pretty hard to pick on him after what happened at that council meeting on Monday, July 23. Over 200 people tried to cram into Henry Baker Hall. They were squished together, sitting on stairs, spilling out into the foyer. City staff hooked up audio in an adjacent room so the overflow could listen to the proceedings there.

The only topic on the agenda that night was a report from the city clerk’s office rejecting a petition gathered by Regina Water Watch. The group was hoping to force a referendum on the public-private partnership that council is planning to use for its waste water plant upgrade. RWW gathered over 24,000 signatures but after the clerk was through double checking the petition, nearly one in three names had been struck from the list and the clerk declared the petition failed to hit the 19,310 signature mark needed to force a referendum.

People were mad.

No wonder that in the days since Jim Nicol, the city’s head of governance, declared the petition dead that the mayor and council had received an earful from people who still wanted a chance to vote on the P3. They’d received so many calls and e-mails that the mayor felt compelled to announce at a press briefing late Monday that he’d be asking council to call a referendum on the issue anyway.

Despite this, as the meeting was called to order, people were still steaming. They were getting to vote on the waste water plant but the stink that hung over the clerk’s petition report hadn’t faded.

And everyone I spoke to assumed that the mayor’s referendum would be rigged — that council would ask Regina voters a leading question designed to guarantee city hall an easy win. “Would you be willing to give up $58.5 million in federal support from the P3 Canada Fund and pay for the waste water treatment plant upgrade solely through your taxes?” Or something like that.

But that isn’t what happened.

Fougere’s motion went like this, “I want to put a motion on the floor that this city does have the referendum on the waste water treatment plant. That’s the first part of this motion, part A. And I’ll speak to the second one quickly as well: that we use the wording on the referendum of what’s in the petition.”

The room erupted in applause that quickly died away as Fougere read out the petition question that was now a referendum question, “Be it resolved that the Council of the City of Regina publicly finance, operate and maintain the new wastewater treatment plant for Regina through a traditional Design Bid Build (DBB) approach.”

I sure as hell wasn’t expecting this.

A vote followed shortly and his motion passed unanimously. I had just spent two days writing blog posts exploring the many reasons why the petition should have been considered valid and it all seemed kind of wasted.

Council was going ahead with the referendum and doing it on the terms that Regina Water Watch demanded.

And that brings me back to the question I saved for the end of the scrum with the mayor.

“So, I think it’s fair to say that with today’s decision, you’ll have blown Prairie Dog readers’ minds. Want to say anything to them?”

“Um, well, not to sound too trite about it,” I think that’s the mayor calling me trite, slyly, “but I want to say that council listens. I listened. All members of council listen. [Because] we don’t agree doesn’t mean we don’t hear you. We hear people all the time. And I’m hoping we can have an intelligent, respectful discussion and be tolerant of other people’s viewpoints. Because during this campaign period of a referendum, nerves will be frayed, people will say things and I understand all that and I respect people’s right to say anything they want to. I just hope it’s respectful, because we’ve heard you.”

Earlier, I’d asked him why, when he could have set the referendum question to anything he wanted, he decided to go with what was on the petition. “Because it was the right thing to do,” he replied.

“My thoughts evolved on this. I talked to my colleagues. I certainly got the temperature of the room. We talked about what was the right thing to do and how should we proceed with this. I just felt that that question, while I don’t want to do a Design Bid Build, I think that is an issue, this is an expression of many thousands of people who asked the question that way. I think that’s the right thing to do,” he continued.

As for Jim Holmes, the spokesperson for Regina Water Watch and one of the chief organizers behind the petition, he was naturally extremely happy about the outcome. When asked how he felt about the fact that the referendum would be using RWW’s question, he said that he was delighted.

“It is important what the question is, and it should be a clear question. And we think it is and I guess city council thinks it is because they’re going to put it forward,” said Holmes.

At one point during the press scrum, Mayor Fougere remarked, “Democracy is about the clash of ideas building a community.”

According to the Cities Act, that clash of ideas will play out now for eight weeks before a vote is actually called. On one side, the city will be defending its decision to go with a P3 model. On the other, Regina Water Watch, CUPE and other groups in the community will be making their case for why a DBB is the wiser option.

It will doubtless be a messy business. And there are certainly easier, cheaper ways to get a waste water treatment plant. But that’s democracy.

For substantially more coverage of this issue (as well as rants about Texas and pictures of cats) visit www.prairiedogmag.com. Letters to the editor (300 words max) should be e-mailed to [email protected]

8 thoughts on “It’s A Referendum”

  1. If only Fougere and cohorts were ‘doing the right thing’…

    If the City were to fairly list both options and let the public express a preference, that would be ‘doing the right thing’. Except that’s not happening.

    But already we see the city is presenting ONLY the P3 option and not very transparently either.

    A couple councilors made some disparaging remarks to me about CUPE and (paraphrasing) said they were now going to fight fire with fire against CUPE. It’s blatant they are only using this time period to blitz us with propaganda for only one option.

    The city already played games with the petition and political dirty tricks including robocalling. Why can’t they just give both sides and let the public decide?

    Giving Fougere a soft ride for what seems to be a charade is simply playing into their hands.

  2. Option 1 (NO vote) – Fed cash up front, but steep job losses and the risk of being exploited by a private monopolized company over time

    or

    Option 2 (YES vote) – Forsake $48 million Fed cash, but with added jobs and annual savings.

  3. Kudos to Reader above for his/her comments, and I couldn’t say it any better myself!!

    What the Mayor seems to miss here is that, not only did he SCREW WITH DEMOCRACY (yeah, yeah it was the City Clerk’s office who is “independent from council” even though they decide her fate ultimately), he has a RESPONSIBILITY to those that he is PAID to represent. Not only by providing the FULL INFORMATION on the Waste Water Treatment Plant Project (which again, argues to even be a truly needed project – upgrades, yes. A whole new one? Not so much. Ask Mr. Wondzura for backup info on these alleged new “regulations” – you might be surprised!), but also to remain NEUTRAL on this situation.

    He is not being paid (at least by the taxpayers) to provide only one-sided information and make this an “Us VS Them” situation like an election. No. He is paid to represent the ENTIRE population, even those that didn’t vote for him. He neglects to recall that more people actually signed this petition than even voted for him, so if he wants to “treat this an election” (his words, not mine), then perhaps we should have Jim Holmes become Mayor and Mr. Fougere can politely step aside?

    Another thing that people need to keep in mind. This bullshit about us losing out on $58.5M in Federal funding is a complete misdirection, and it’s disgusting that he would try this scare tactic, by saying that “oh your taxes are going to skyrocket and your water rates too” if you choose to vote YES to keeping out infrastructure public. If you read this document http://www.economy.gov.sk.ca/2010-MPI – You will read the most up to date information on Major Projects that the Provincial Government is aware of. Note, of course, the rather “dated” figure for our Waste Water Treatment Plant upgrades, at “only” $120M.

    But, note moreso how other centres are funding their infrastructure upgrades of a variety of types. The ever infamous BUILDING CANADA FUND. You remember that, don’t you? I believe it was the City who thought, in their infinite wisdom, they would apply to this fund for the STADIUM PROJECT, and of course, got the door slammed on their face because the Feds aren’t in the business of funding entertainment facilities. The question that HAS to be asked here is – WHY DID THE CITY NOT APPLY FOR THIS FUND FOR THE WWTP UPGRADES?? This project has been “in the works” for many years now. And since it is allegedly increased Federal Regulations that is “requiring” this major upgrade/facility, then there is absolutely NO REASON the City couldn’t have, and shouldn’t have, already applied for this funding. If you bring this up now, the Mayor and Administration use the excuse of “oh it’s too late to apply for that funding, it’s off the table”. But it certainly wasn’t 4-5 years ago, when this project was scheduled to actually BEGIN.

    As you can see there are many, many unanswered questions that the City of Regina refuses to answer. And, a reasonable person would have to ask, if the P3 is such an amazing option, should it not be able to stand on it’s own merits? Why does the Federal Government have to basically shove it down our throats by dangling a huge carrot with huge strings attached? Why does the City have to try anything in it’s power to ONLY tell us the potential benefits of a P3, and ignoring talking about ANY of the risks?? Why didn’t we go with a P3 on the Stadium Project??

    There are many questions, and fewer answers. The Mayor and City Council owe us, the taxpayers, a duty of care (legal term), and they once again fail at meeting those requirements/expectations. Thus, until the time they are willing to provide the taxpayers with the FULL STORY, we should continue to push and poke at them until they are willing to provide us that information, without the need of CUPE or other organizations having to be the responsible ones and telling us the “other” side of the story.

  4. This is not a cupe thing, its about a major natural resourse that if in the wrong hands could be a big problem for all that live in Regina and surrounding communities.If one wants to make it a cupe thing than make a big deal about the Regina Chamber of Commerce, they are a large group that pay a membership fee and oppose a minimum wage increases.

  5. I suggest having a public debate at the Council on TV before holding the referendum. I beleive it is better to outsource the project for the designing and building stage and then lease the plant for the operating and maintenance stage. Simply voting DBB or DBFOM may not be a good idea.

    Private management can be more cost saving, efficient, accountable and even more beneficial to consumers. However, private management is not the aim but a means to encourage competition, improve the quality, increase service access and give customers more choices.

    There are not many notable successful examples of DBFOM (note that Deloitte also admits that there are few examples of DBFOMs in the water/wastewater sector) in the water sector in Canada. From the Deloitte Report, one present project is the Wastewater Treatment Plant Upgrade at the capital cost of 15 million (which is insignificant) in the Town of Taber, AB.

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  7. The new regulations including the federal Wastewater Systems Effluent Regulations (the “Regulations”) on managing wastewater effluent under the Fisheries Act[i], add to municipal governments’ existing legal obligations to bring up wastewater facilities to new standards in fairly short order. Given the cost, size and scope of the infrastructure needed, P3s pose to municipalities as an attractive and cost-effective implementation model to meet the new challenges.

    According to a newly released report from the Conference Board of Canada, out of 42 P3 public infrastructure projects in the past three years, 22 were finished on time, the report shows. Thirteen came in early, while seven were completed late. The City of Saskatoon has also taken note of the approach, opting to go the P3 route for a future Civic Operations Centre for its public transit fleet. Those that see positive outcomes typically are not publicized, such as the Lac la Biche (in AB) wastewater treatment plant, completed in 2011, and a water treatment facility that came online in 2000 in Moncton, N.B[ii]. A study from the United Kingdom found that P3 projects typically finished one per cent earlier than scheduled and with virtually no cost overruns, while government-led projects finished 17 per cent late with cost overruns of 47 per cent[iii]. In May 2003, the Economist compared services in England to those in Scotland, where water remains a nationalized industry, and in Northern Ireland, where water is managed by a government department. It found that English utilities score better on drinking water quality tests, comply more often with sewage discharge regulations, and lose less water to leakage than do Scottish or Irish utilities. Furthermore, English utilities provide these superior services at lower costs. Average household bills are lower in England than in Scotland or Northern Ireland. Most striking is the difference in commercial water bills: A medium-sized Scottish office pays 16 times more for water than its English counterpart. The Economist’s conclusion was inescapable: “Private water firms beat the public sector on all counts.”[iv] Rich international evidence shows that P3s substantially outperform conventional government-led projects both in terms of cost and completion time.

    While the government still owns the infrastructure and is ultimately responsible for ensuring related services are up to standard, the government can reduce or withhold payment if the private partner does not deliver. Goals in terms of cost savings (through use of economies of scale, )capacity, efficiency and effectiveness can be achieved while meeting the public need. Therefore, a P3 is not necessarily a bad thing.

    Nevertheless, there are higher private financing costs and risk premiums that the city will ultimately have to pay the private company. Some would say that perhaps in principle a P3 can work, but so much depends on the specifics of the agreement negotiated between the City and private partners. In other words, a P3 might be cheaper, but it might be more expensive, even with the federal government subsidy. It just depends on the specifics of the contract. Risk might be mitigated, but how and to what degree may depend on the specifics.

    If the City is SO forthcoming….then they should RELEASE the redacted portions of the Deloitte report, and then be prepared to have a REAL debate, in public, with the Yes side. Please bear in mind that the city manager has already set forward a $340,000 “education” budget to fund advertisement encouraging residents to say no, apart from the $120,000 set up for non-partisan referendum advertising [v].

    While the taxpayers forego $460,000, they should at least expect something to see. The author suggests having a public debate at the Council on TV before holding the refe-rendum as simply voting DBB or DBFOM may not be a good idea. If the government does not lose money but profit from the Regina project, the taxpayers will be better off than if they are required to pay more if there are unexpected cost overruns or other unexpected costs. The difference of the interest, the extra money lost from leasing, the lack of transparency and the bundling of P3 Canada makes us to reconsider the choice of DBFOM. The BEST OPTION is to combine the outsourcing part of DBFOM and the long-term financing part of the City, the best from each model. The management model is similar to that of Lac La Biche County, AB, which is a successful example. The author suggests outsourcing the project for the designing and building stage and leasing the plant for the operating and maintenance stage. In the author’s outsourcing model, the risk of additional costs is borne by the private sector partner, while the government interest rate bargain can be still taken advantage of. Also, the City can benefit from a bonding fee with a private contractor for the first two stages (please note that partial financing can be used if there is not a bonding fee so as to give the private contractor a restraint, which is reflected by the case of upgrades to the Evan-Thomas, Victoria and Sudbury facilities[vi]) and from a leasing fee for the next two stages.

    Let us look at the next table. We assume that the borrowing amount will be $118.3 million, and we will use the City’s borrowing rate 3.82% as the discount rate for DBB and 5.82%for DBFOM. The contract is for 30 years, and it is supposed that the City’s deal structuring cost is at 0.5%, and 8% for the private sector (with 4% for each party, besides the interest rate of 5.82%), federal funding of $58.5 million can be obtained for DBFOM, and that the plant can be leased at $5 million per year since the wastewater can be sold for $5 million annually to potash companies in north Saskatchewan[vii], then we can have the results in my blog.

    Much of the data of this table was based on the reports by Hugh Mackenzie and of Deloitte LLP though the author has changed the net present value calculation significantly[viii].

    Here it is clearly demonstrated the government should not forgo the financing part as it is more economical if the government handles it. Moncton ended up paying $31 million for a $23 million water treatment plant due to the higher borrowing cost than the City. Also, the government need to take control of the project. Due to lack of control in the Hamilton wastewater treatment project, in addition to the workforce being cut in half within 18 months, millions of litres of raw sewage spilled into the Hamilton Harbour, homes were flooded and major additional costs were incurred[ix].

    For supervision, a committee consisted mostly of elected members from independent organizations (which may include government officials in charge of different related departments) may be necessary to supervise the project and make decisions on some important issues.

    In a word, though most P3s can actually enhance the ability of government to deliver core public services on-time and on-budget, while maintaining appropriate controls with the procuring government, an efficient, ecologically sound, environmentally friendly (eg using the system of Bear River Solar Aquatics Waste Water Treatment Plant in Nova Scotia[x]) and socially beneficial, accountable and sustainable project with the most increase in social welfare would be a priority.

    [i] Wastewater Systems Effluent Regulations, SOR/2012-139; Fisheries Act, RSC 1985, c. F-14.
    [ii] Vanessa Brown: P3s: Risks & Rewards, Leader Post, August 29, 2013.
    [iii] Hugh MacIntyre and Charles Lammam: P3 Best Bet for Wastewater Project, Leader Post, August 6, 2013.
    [iv] John Peet, Priceless: A Survey of Water, Economist, July 19, 2003, Page 6; Water Industry: Frozen Taps, Economist, May 31, 2003, p. 56.
    [v] Marco Vigliotti: Plant Referendum on Sept. 25, Page 3, Regina Metro, August 15, 2013.
    [vi] Catherine Doyle and Timothy J. Murphy: P3s in Wastewater Treatment Facilities: Opportunities for Municipalities, Nov, 2012. See more at: http://www.mcmillan.ca/P3s-in-wastewater-treatment-facilities-opportunities-for-municipalities#sthash.O8vpxymC.dpuf
    [vii] Brent Patterson. 3 December 2012. “Regina Sells its Water for Potash Mining”, http://canadians.org/blog/?p=18251.
    [viii] Deloitte. 22 January 2013. “City of Regina Wastewater Treatment Plant Expansion & Upgrade Project, Summary of Delivery Model Assessment”, Page 25. Hugh Mackenzie. 6 May 2013. “Flushing Money away”, Page 17.
    [ix]The Council of Canadians. 29 August 2013. “Conference Board of Canada Report Sweeps P3 Problems under the Rug”, http://www.canadians.org/blog/conference-board-canada-report-sweeps-p3-problems-under-rug.
    [x] Government of Canada: Bear River Solar Aquatics, Aug. 13, 2013. Please also see the website: http://www.collectionscanada.gc.ca/eppp-archive/…nova/bearriver.html.

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