W.U.C. 2010 Proposed Rate Increase – More
Recent revelations would indicate that the W.U.C. has been mismanaged, at the highest level since August 2003. This mismanagement can be shared by the Mayor and City Council, the W.U.C.’s Board of Directors, and senior Management continuing unabated since August 2007.
In 2007 a “Water Rate” increase of 88.08% was decreed by City Council to tackle crumbling infrastructure. Even with that increase the W.U.C. has been unable to meet its stated requirements. Today, three years later the same scenario is being played out and again doomed to utter failure without some drastic rethinking.
Today the W.U.C. is faced with FOUR seemingly insurmountable problems. The FIRST and foremost is the direct and indirect involvement in a “Business Enterprise” by elected officials. The SECOND and equally important feature is the direct involvement of Enwin Utilities Ltd., a fore-profit corporation controlled by elected officials, where costs are allowed to skyrocket unchecked regardless of circumstances. The THIRD is the composition of the Board of Directors and their apparent subservience to political agendas rather than the consumer. The FOURTH and equally important is the apparent inability of senior management to think outside of the box.
In the FIRST instance, elected officials saw fit to hold rates stagnant for seven consecutive years even in the face of an annual average cost increase of 2.0%. It has been learned that this same position is being pushed today by The Mayor under the phrase of “not this year.” This political stance is tantamount to an ostrich burying its head in the sand.
In the SECOND instance, documentation would tend to indicate that the W.U.C., an entity owned by the City of Windsor, is being overcharged for “Administrative Services” provided by Enwin Utilities Ltd., a for-profit entity solely owned by the City of Windsor. Since 2004, Enwin Utilities Ltd. has paid $11 Million in dividends, another $4 Million scheduled for 2010, decreed by a Board of Directors controlled by elected officials. With almost all Enwin revenues derived from either Hydro or Water producing entities, this gives rise to a clear case of backdoor municipal taxation.
The THIRD instance again speaks to political interference in a purely business operation. With a Board of Directors answerable to elected officials and not the client/consumer, this gives rise to expediency rather than professional management of a life sustaining commodity. We all have seen and felt the effects of mismanagement in the auto sector well the things every man, woman, and child require to maintain life are headed in the same direction unless drastic action is taken.
As for the FOURTH instance, senior management of the W.U.C. must be held accountable for their actions and/or inactions. The almost total reliance on arms length professional consultants must be tempered with common sense. To date the purported position of senior management is we must follow, to the letter, the guidelines of a third party regardless of the impact on society. It is this posture that has placed the W.U.C. in a severe economic bind, which by the way will not be rectified by the current proposed rate increase of 30% over three years without some very drastic changes. Today it is 30%, what about 2013, are we headed for another 30% over three years?
It is not whether the W.U.C. needs a “Water Rate” increase it is a pure and simple question of how much of an increase can the client/consumer sustain? Today the W.U.C. management is pushing for a 10% increase every year for three years, better known as Option A. This will see the “Water Consumption Rate” increase from $0.266 to $0.371 per cubic meter in the first year resulting in an average bill for 22 cubic meters going from $32.90 to $36.25.
By the end of the three year period it will rise to $0.612 per cubic meter resulting in an average bill for 22 cubic meters being $43.94 This type of increase is unlikely is unlikely to stop in 2012 but be continued until at least 2015. In essence by 2015 the “Water Consumption Rate,” unless more political fiddling takes place in the interim, will rise to $1.068 per cubic meter resulting in an average bill for 22 cubic meters of $58.49
Had there not been blatant political interference over the past seven years, the “Water Consumption Rate,” based solely on incremental increases related to the cost of living, would be approximately $0.312 per cubic meter or $34.47 for an average 22 cubic meters. The one thing that hasn’t been discussed in the streamlining of administration and support services which appear to be skyrocketing out of control.
Under current economic circumstances, which are forecasted to last another three to five years, a 10% annual increase in each of the next three or six years is absurd and borders on insanity. Taking into account that infrastructure needs must be addressed, an increase of 5.0% annually, beginning with a figure of $0.310 or $0.320 per cubic meter in 2010, must be considered along with a drastic reduction in administrative and support services costs otherwise the whole exercise is doomed once again.
