Private partnership for utility approved
Winnipeg city councillors approved by a 10-6 vote the creation of a controversial new utility after nearly nine hours of discussion and debate on Wednesday.
Under the plan, the city's water and waste department will be transferred to a not-for-profit company with a board of directors appointed by the city. The public-private partnership will mean the utility remains 100 per cent city-owned but operated by the arm's-length organization, which will control the infrastructure and receive the revenue from ratepayers.
'Let's not go out and throw the word privatization around the way Joe McCarthy used to throw the word communism around.' —Coun. Justin Swandel
The city will sign a management agreement with the board outlining expectations of the new agency in regard to the 900 employees who work in the current department.
Wednesday's council session was prolonged by 23 delegations — for and against the plan — who spoke before the councillors even started their own discussion on the matter. Council also waded through several motions and amendments to the plan.
Mayor Sam Katz has been pushing for the new utility for about a year and a half. Teaming with the private sector will help complete about $1 billion worth of sewage-plant upgrades and combined sewer replacements that the city alone could not afford, he said.
"It's time for a change," he told councillors and about 300 observers who filled to capacity the council chambers.
Rallies held to oppose deal
In the weeks leading up to the vote, opponents of the plan — including some councillors — held rallies and delivered flyers in an attempt to convince the city to trash the plan or at least defer it. They feared the decision would be the first step to privatizing public utilities.
Councillors John Orlikow and Jenny Gerbasi lost a bid early in the meeting to delay the motion. Orlikow had suggested the city needed to first develop a defined act that would outline the legalities of a new utility.
Gerbasi complained about the lack of clarity in the proposed deal, saying it was vague and contradictory. She said more time was needed to sift through the details.
The privatization claims aggravated Coun. Justin Swandel, who supported the plan.
"Let's not go out and throw the word privatization around the way Joe McCarthy used to throw the word communism around. I understand the arguments, I understand the law, I understand the plan and the amendments and I'm ready to move forward at doing something better for the ratepayers of the City of Winnipeg water and sewer services," he said.
Privatization concerns overblown: Canadian Taxpayers Federation
Colin Craig, Manitoba director of the Canadian Taxpayers Federation, who spoke in favour of the utility, said concerns about a private-sector partnership are overblown. He cited an example in Indianapolis, where the city did a public-private partnership.
"Ladies and gentlemen, the sky did not fall in Indianapolis when they engaged a partnership for sewage services. Ratepayers saved millions of dollars, environmental rate violations went down, employee grievances went down, and wages actually went up," he said.
Before the final vote was tallied, there were some changes made to the deal. Initially, it called for utility rates to be set by the province's public utilities board, rather than the city, as is currently done.
However, council agreed to retain control over setting the rates, at least in the short term. Council also agreed there must be a referendum if any future council tries to sell or privatize the utility completely.
There is no date set as to when the utility takes effect. It will be several months as it must first go through a provincial regulatory process.