Collingwood Public Utilities…… and Nobody Says:

Collingwood Public Utilities is a mess and needs fixing. They can spin it as much as they like up at 43 Stewart Road. They can dispute the findings of True North Consultants operational review until the cows come home. Everyone knows now that this little fiefdom is in for some major changes in the way it does business and serves the people of Collingwood. As I said in my last post, I sat through Mr. DeVries presentation to council Monday evening. Unlike Cam, I was NOT elected to town council, so I can say it out loud, “A lot of what was presented was above my head (and pay grade) and was very complicated”. I was pissed off at Cams very public admission that the report before council, even after he read it twice, was too complicated for him to understand. I was pissed off because this statement plays right into the hands of those who are happy with the status quo. I can hear it now, “This is all very complicated, even members of council admitted that. You all just go back to sleep and leave it to us who know best to figure out”.
Although the problems in this public utility go back many years, I believe they were compounded back in 2012 in the way the last council sold off half its share to PowerStream. The town should have maintained 51% control over the utility. I believe it would not have affected the selling price by a huge amount, but it would have vastly increased the value of the town’s share that it still owns. Think about it, imagine if the town decided to sell its remaining 50% share right now, who would it be able to sell it to? The only available buyer would be PowerStream, at a vastly discounted price, because it is the only entity that would be willing to buy it. My personal opinion is that the town should get completely out of the electrical distribution portion of the utility and take complete control over the water and sewer portion and sever its relations with PowerStream; however that shakes itself out from a financial point of view. The way this is structured now, we have PowerStream, a private corporation, as a 50% owner, which has a stated objective of earning stable regulated returns (profit). While the Town, which owns the other 50%, has a non-profit break-even mandate. How can that partnership ever work? This underlines how little thought was put into this sale when it was structured at the time of the sale. Much like everything else those same players put their greasy hands upon.
I never agreed with this sale from the very first time I heard about it. The money has already been pissed away like a drunken sailors pay cheque on shore leave. Mainly on disjointed recreation tents, which are costing a fortune to run and will look like crap in a few years. Now the sale is done and we can’t put the toothpaste back in the tube, so it’s time to fix this bloated inefficient utility once and for all. This should be done in a way that serves the citizens of Collingwood in a permanent cost efficient manner. I think the new council is up to that task, even with its one obstructive disagreeable member. It will take all of us to get involved and keep paying attention. This is one of the most important files on the council’s agenda right now and will set the tone for the rest of this administrations mandate. I believe the “out of character” behaviour of Brian Saunderson Monday evening was a result of his complete frustration with the whole situation, (I’m not quoting just guessing). Contact any of the councillors that you voted for a couple of months ago and let them know what you want to see happen to your portion of this public utility, especially the ones that are likely to be sitting on the fence. You know who they are, I don’t need to keep telling you.
The report will be on the councils agenda again in 30 days and, as much as my chattering colleagues disagree with me, I believe that gives ALL members of council a chance to thoroughly read and understand the document, to be present and to weigh in on its findings. If they had accepted the report as is on Monday evening it would have probably slipped past this loud mouthed bloggers attention and probably a few of you out there as well. I will let you know exactly which council meeting this is being presented at so you can all make sure you are paying attention.

Let’s get this thing fixed once and for all.


14 thoughts on “Collingwood Public Utilities…… and Nobody Says:

    • James, Welcome to the comment section of this blog. Ian Adams quit the EB on 20th October 2014. Although I often disagreed with him on various issues, he definitely had his pulse on the local political scene. His replacement, Paul Brian is young and new to the area. I have spoken to him a couple of times and offered my help to try and get him up to speed. To this point, he has not taken advantage of that offer. The only thing you can do is write to the EB and let them know your issues.

  1. Cole’s Notes Review

    First off Power stream

    Power stream is private corporation owner by 3 municipal shareholders
    Markham 34% Barrie 20% Vaughan 45%

    Simple term we could merge Collus into Power stream take a percentage of the total owner ship. How much, I’d have to get out a calculator and is not important to today discussion.

    Let’s help Cam out and any other councilor who’s having a problem understanding the report. In simple terms, it’s a distribution of cost for common usage of services and assets

    That simple!!

    This report is how they allocate these costs i.e. the rule book.
    Do we have a rule book?
    Do we follow the rule book?
    Who understands the rule book?
    Are the allocations fair between both parties?
    Is worth the cost of analysis vs possible over or under pay for service for each party

    So let run through simple example

    When you go out with friend from work to discuss business at your local watering hole, do you divide the bill equally, roughly allocate to each, do you have separate bills?

    When you order the same thing you split the bill …simple

    What about the anti-pasta in the middle of the table? How do allocate its cost between friends? You ate 70% your friend ate 30%, how do split cost now? Do you allocate accord to your consumption? When you both equally own the company, who cares you just expense it. This is the case when Water Company and Power Company were both owned by the town.

    Your friend now sells half of his business to friend of the family

    Now answer the same questions
    Let’s add one more element to this example…
    Cost …anti-pasta cost $5.00, what if $50.00

    Simple alternative you both get your own anti pasta
    You waste 30%, your friend wastes 70% overall it cost both more money.

    How much did this report cost? In our example we’ll call the consultant “the server” they get a “tip” a consultant fee

    The server gets a tip they don’t care how the bill is paid along as they collect a “tip” They collect more “tips” if you come back for more their services.

    Here’s a solution, it’s really, really, simple have town auditor write up a rule book have drafted by town lawyer. In the footnotes it seem this was already done, the consultant believe they could do a better agreement.

    The better question is it worth time and effort to rewrite another rule book. I would say no.

    I believe the original rulebook was written by Tim Fryer, so I would count on Tim’s opinion. Are cost allocation rule acceptable?

    Does this help to understand the consultant report?

  2. I agree wholeheartedly that there are changes that need to be made and in particular that the services agreement is in need of a significant overhaul. That should have been done in concert with the sale of 50% of COLLUS shares. A little background will likely help us understand why the issue is considered “complicated”.

    In it’s early years, Collingwood had a utility called the Collingwood Public Utilities Commission. As a Commission it operated both the water and hydro facilities in the town on an “at cost” basis and there was a lot of pride taken by the Utility in keeping a robust system in place while maintaining low rates. Around the year 2000, the Provincial government decided to change the Municipal Electric Utilities into Businesses which paid taxes and earned revenue. In doing so the government made the “town” the sole shareholder of the business and allowed the shareholder to sell their utilities or keep them and earn a profit. Collingwood chose to keep their utility to maintain some local control over the activities of the hydro utility. The rules at the time required a separation of the water and hydro utilities. Unfortunately this would have meant a reduction in the efficiencies of the Public Utility Model where both the water and hydro utilities shared one billing system, one set of administration staff, one set of engineering staff, one building, etc…

    In Collingwood the separation was originally done by way of setting up a third company which would end up being “Solutions”. Solutions then became the entity that contained all the “shared” staff and was responsible for allocation of costs for the one set of administration costs between water and hydro. The theory was sound and with the sole owner of both assets being the town there were really no losers within Collingwood. The key was to avoid cross subsidization between Hydro and Water given Collingwood also owned the hydro assets in Stayner, Creemore, and Thornbury.

    The rules governing the sharing of costs required the Shared Services Agreement which is currently the cause of concern.

    All was fine until the 50% sale brought in a third party meaning that profits were now being taken out of the community and in theory the third party could sway the allocation of costs in such a way that the water side takes on more than their fair share of costs to increase profits for the hydro side.

    What is surprising is that the Shared Services Agreement was not carefully rewritten at the same time that the sale occured. It is definitely time to review that agreement to ensure that the town of Collingwood and the ratepayers are well protected and get the best deal possible.

  3. I started to read the report and the first thing one finds, at the very beginning of this 90+ page document, is a disclaimer part of which states “there is no guarantee that the information is accurate or complete”.

    • “… a disclaimer part of which states, “there is no guarantee that the information is accurate or complete”.
      Well, once the report is padded with ‘input’ from those who have it in their hands now that most certainly will be the case. No doubt about it.

      • The report clearly states, and no one at council disputed it, that they “couldn’t find” most of what they needed.

        You don’t blame the teacher for giving you a failing grade, when you didn’t turn in most of the assignments.

    • Hey Cap. There are 92 pages of problems. BTW, the previous council asked for this report, and “we” paid $32K for it. Now that a few of them don’t like it, how much more will it cost us to de-bunk the bunk?

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