Why The Rush To The Sewage Plant?

Regina Water War - Referendum 2013You’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.

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FOOTNOTE
¹ And that’s true. While the feds have yet to lay out exactly what hoops municipalities will have to jump through to access the new Building Canada Fund, they claim they will be checking each project for P3 viability. Of course, if a municipality were to have a bylaw on the books saying they can’t use a P3 for a certain project — perhaps because of an inconvenient referendum result — that would make the P3 not so viable and the project  would probably then move up to the next step in the approval process. Of course, that doesn’t mean Building Canada Fund dollars are a slam dunk in the event of a Yes side win. But it does mean that maybe, just maybe, the city will have a range of options it is perhaps failing to … erm… accentuate in its pre-referendum rhetoric.

² Whoops. When I first posted this blog entry, I left the word “Rural” out of the name of this fund. Canada Saskatchewan Municipal Rural Infrastructure Fund or MRIF is the correct name.

Author: Paul Dechene

Paul Dechene is 5'10'' tall and he was born in a place. He's not there now. He's sitting in front of his computer writing his bio for this blog. He has a song stuck in his head. It's "Girl From Ipanema", thanks for asking. You can follow Paul on Twitter at @pauldechene and get live updates during city council meetings and other city events at @PDcityhall.

12 thoughts on “Why The Rush To The Sewage Plant?”

  1. Thank you for factually reporting what everyone instinctively knows: the mayor and city are lying their faces off.

    If we privatize water, we don’t automatically “lose” $50 million. It may disqualify us from one grant program, but as you have reported there are other options.

    I wish you would start reporting on the costs that will hit us in the event that the city’s expensive vote no campaign wins.

    I’ve heard the p3 administrative overhead could be millions or 10’s of millions, eating up a certain amount of the $50 million ‘saved’.

    Also why is nobody reporting on how much extra we will pay to fill the privatized water company’s profit demands? $5 million per year? $10 million? $15 million? The city’s expensive propaganda campaign doesn’t say.

  2. This whole P3 thing is getting scarier and scarier. The panic mode the City has been in…starting with the frantic vote count re the referendum request, trying everthing to stop a vote… methinks something is rotten. Somewhere. Now tryng to scare the voters. What a bunch of crap! I am ashamed of my city.

  3. Pfft! Anyone who knows anything at all about it knows this is the biggest tankful of BS ever spoken:

    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.

    Wow. Foooor shhhaaaame.

  4. Remember Fiacco raising our water and sewer rates 8 years ago at 9% per year. This increase we were told was to pay for our future wastewater treatment plant. In eight years only “$50 million” has been collected to date (Fougere statement in July)

    Let’s see … the city applied (forced) a .45% property tax increase for up to 10 years. 10 years at .45% per year is suppose to generate “$300 million” (for stadium maintenance costs).

    So can someone at city hall explain to the taxpayer where all those other millions collected over the last 8 years from the water and sewer rate increases disappeared to?

    And now this same group of pirates want me to support a NO vote without even showing me a contract or any type of documentation exposing the “true” numbers that support their P3 claim?

    Insane. I have had no issues with public services in this area and it’s been run by public money and employees for decades. I’m voting YES.

  5. West58 – these files contain some of what you seek

    http://www.regina.ca/opencms/export/sites/regina.ca/residents/water-sewer/.media/pdf/proposed_utility.pdf

    http://www.regina.ca/opencms/export/sites/regina.ca/residents/water-sewer/.media/pdf/utility-budget-in-brief.pdf

    Might want to grab them before they’re taken down.

    You’ll notice they’re from back in 2012, when the city still called it wastewater, not the vote no propaganda campaign’s revised term ‘sewage’.

    It called for $146 million upgrade to the plant, but has now apparently ballooned over the last year to $225 million, a sum apparently in alignment with Deloitte Touche’s guesstimate of the level at which private profit operators start to salivate. We are apparently supposed to be happy with this one year 54% price hike because p3 will make the private corporation responsible for cost overruns. Are we paying $79 million extra, just to be assured we aren’t paying extra?

    Also bone chilling is the comment that the system will require $2,000 million over 20 years just to maintain current standards. (Yes, that’s $100 million per year.)

  6. Last year’s documents provide some interesting figures. A real accountant may want to chime in and correct me if I’m wrong here:

    Water bill rates are set for 3 year periods, and the next time is coming soon, in 2014. Interesting.

    There are approx 60,000 residential bills paying average of $1,470 each
    There are approx 3,200 commerical bills paying average of $9,612 each

    The many years of water bill hikes have created a situation where we bring in $120 million per year but operations only cost $55-58 million.

    The apparent $62 million surplus is consumed by expensive ongoing capital projects from things like a $125,000 manhole truck to setting aside $33-43 million per year for the anticipated wastewater upgrades.

    The 5 year wastewaster capital budget seems to show we should have at least $221 million saved up to pay for the 2016 wastewater plant upgrade, which they also estimated as costing only $146 million.

    So it’s not clear why there’s a crisis at all, and why we would need to privatize the water department to get financing.

    Nor is it clear how the price is changed from $146 million last year to $225 million in this year’s vote no campaign.

    Even if the price has jumped to $225 million (!!!), we are on track to raise $221 million of that without any private involvement.

    The threatened $276/year increase seems unnecessary. But even if that levy were to be imposed, it would disappear after 3-4 years.

  7. Wow: If you’re not one of the 86% of Reginans who actually have no idea WTF is going on, this ballot question will not help you:

    http://www.reginareferendum.ca/home/

    I guarantee of the ppl who vote, 50% won’t know what the hell they are voting for.

    This however can only help the “Yes” side.

  8. I dislike being bribed with my own tax dollars. The federal grant of $58M isn’t ‘free’ money…you already paid for part of that with your income tax. So ‘losing’ won’t really be a huge issue compared to the total contract cost (build and run for 30 years) which was north of $700M according to one of these posts (sorry I can’t recall which). After all $58M is only about 8% of the total contract cost…which sounds a lot like a profit margin.

    Sorry the math on this one isn’t making a lot of sense to me.

  9. No matter how I ran the numbers, the so-called $58.5 million “loss” could not arrive at a $276 penalty fee. Now, on scouring the city’s threat, I see they using $79 million which they claim will be the extra cost if we don’t blindly follow them. But I can’t see that justified anywhere?

  10. Mandryk’s a much better writer than I am. Probably the best political writer in the city. (Also one of the funniest people on twitter.) I’m not surprised he assembled a concise overview of the big picture like that. The stuff about how Wall is the real winner in this is a good angle.

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