Category Archives: City Council

City Council, Illinois American Water

About that water buyout plan….

Even if I were in favor of the city buying the water company, which I’m not, I would still think this was a fool’s errand:

The City Council will vote Tuesday on whether to spend up to $50,000 to hire Clark-Dietz, a Champaign-based engineering firm, to represent all of the entities in discussions with Illinois American . . . Though [the franchise agreement’s] buyout option will resurface in 2008, some Peoria officials believe there may be a chance to buy back the waterworks before then and perhaps for less than the $220 million pricetag set by appraisers.

Note to city council: do a Google News search on “RWE American” and see what articles come up. You’ll find that cities in Kentucky, West Virginia, Tennessee and elsewhere have all looked into the possibility of buying a piece of RWE’s American Water Company. All have been rebuffed by RWE.

Lexington, Kentucky, has a familiar story. Back in December, their city council “approved setting aside $50,000 for the city’s water committee to do its work in examining the possible purchase of Kentucky American Water from RWE AG . . . Last week, the water committee decided to hire Coady Diemar Partners, an investment bank that provides strategic financial advice and corporate finance services, to guide the committee through the process.”

And for that money, they got this response from RWE: “The record is clear, that neither RWE nor American Water have expressed any interest in selling Kentucky American Water.”

Now, wasn’t that worth $50,000?

Not to be outdone, Peoria is also poised to spend $50,000 — perhaps up to $113,000 — to be told essentially the same thing.

I just don’t understand the council. Can’t they get it through their heads? RWE is not going to sell American Water Company in pieces. I think RWE has made that abundantly clear from the beginning. What part of their stance doesn’t the city understand?

I guess after dozens of years of ignoring Peoria residents on this issue, they’ve just become deaf to water-buyout opposition.

City Council, Illinois American Water

Dream On

The cities of Urbana and Champaign are planning to join forces with Peoria and Pekin to explore acquiring Illinois American Water Company assets in their respective communities. … Urbana Chief Administrative Officer Bruce Walden disclosed the effort at Monday night’s meeting of the Urbana City Council, saying the city managers and attorneys in the four communities have been talking on a regular basis.That’s the news from the Champaign-Urbana News-Gazette (hat tip to Bill).  All I can say is, “dream on.”  I’m sure whenever they approach RWE, parent company of Illinois American Water Company, they’ll get an almost identical answer as the city of Lexington, Kentucky, received:

The city has misinterpreted RWE AG’s intentions to sell American Water Works as a sign that Kentucky American Water is for sale, an executive with American Water wrote in a letter to Mayor Teresa Isaac.  RWE — the German utility conglomerate that owns American Water, the New Jersey-based parent company of Kentucky American — is not interested in selling Kentucky American, wrote Daniel L. Kelleher, senior vice president external affairs for American Water Works.  “The record is clear, that neither RWE nor American Water have expressed any interest in selling Kentucky American Water,” Kelleher wrote in his Dec. 29 letter.

The city continues to waste time and resources on this quixotic quest to own the water company.  And now, they’re going to waste more of our money.  Check this out (additional quote from News-Gazette):

Walden said the four cities have tentatively agreed to the following joint steps:

  • To budget $1 per capita ($37,000 in Urbana’s case) for hiring a consultant to advise the cities.
  • To enter into an intergovernmental agreement to organize the joint efforts.
  • To pursue state legislation to permit the sale of water company assets . . .
  • To contact other Illinois communities served by Illinois American Water to determine their interest in joint efforts.

Did you catch that first one?  They’re going to budget $1 per capita to hire a consultant to advise the cities.  That’s $1 for every person in the city of Peoria, or $112,936.  That’s almost enough money to hire two firefighters for a year.  Where is that money going to come from?  Out of their hat?

You gotta love our city council.  They’re so creative, persistent, collaborative, and willing to spend money on something that has been rejected by their constituents, defeated by the council for decades, and highly likely to fail.  Yet they’re seemingly unable or unwilling to apply that same creativity, persistence, collaboration, and willingness to spend money to things that their constituents have been screaming for:  fully staffing the fire and police departments, repairing roads and sidewalks (esp. in older neighborhoods), alleviating the storm water problems in Rolling Acres, and other basic city services.

Still waiting patiently for the new council to live up to their “basic services” campaign promises . . . .

City Council, Peoria Disposal Company

Council Roundup: Peoria Disposal Company

4 Comments

Peoria Disposal Company (PDC) wants to expand their landfill in Pottstown, and some Peoria residents aren’t happy about it.  But don’t complain to the city council — it’s a Peoria County decision.

Mayor Ardis explained that PDC was giving tonight’s presentation at his request as a courtesy, but that no discussion or vote would be taken since it’s not in the city’s jurisdiction. 

Brian McGinnis, attorney for PDC, explained that they would be filing the application tomorrow morning to expand the landfill.  Once it’s filed, PDC will not be able to comment publicly on it until a public hearing is held.  That hearing will happen within 90-100 days of filing, probably in February.  So, anyone who wants to speak for or against the expansion should keep an eye out for the public hearing date.

Peoria Disposal Company was founded in 1928 by the Coulter family and has been family owned ever since.  Chris Coulter, Director of Sales and Business Development, touted the company’s 100% compliance with Illinois Environmental Protection Agency (IEPA) inspections, earning them the Environmental Compliance Award for 12 consecutive years.  He also said that the company wants to expand because they will run out of capacity in early 2009 and they want to continue servicing their current customers.  They don’t expect any increase in annual waste receipts.

Ron Edwards, Vice President of Landfill Operations, tried to allay fears that hazardous waste at the site would infiltrate ground water, surface water, or air quality.  He explained all the treatments and precautions the landfill applies to hazardous waste.  One of the more surprising slides was the one comparing (contrasting, actually) PDC and Love Canal. 

Van Auken, once again, asked the questions on everyone’s mind:  Why are we one of only 16 communities who have this kind of disposal?  Why do other communities not want this kind of disposal in their cities?  Why should Peoria take this risk?

Later, during citizens’ requests to address the council, three people spoke out against the landfill expansion.  Dr. John McClain said his concern is not that PDC is bad company; in fact, he believes they are a good company.  However, there are things that they can’t control: accidents, natural disasters, terrorism.  He concluded, “We are accepting hazardous material that other communities do not want and our safety cannot be guaranteed.”  Of course, the usual objection from the Sierra Club was voiced.  But perhaps the most eloquent opponent of the expansion was Bill Cook who observed, “This expansion is privatizing the benefits and socializing the risks.”  That is, PDC gets all the profits while hundreds of thousands of residents shoulder the risk of potential contamination of our water supply.

Expect a battle on this one.

Received and filed.

City Council, City of Peoria, Insight Communications

Council wants your thoughts on cable TV

9 Comments

Councilman Turner wants the council to hear from you regarding cable television. The city’s franchise agreement with Insight is ending next year, and Turner thinks Insight’s service leaves something to be desired. Several other council members chimed in with concerns about everything from high prices to service responsiveness. So, the motion to hire an attorney to negotiate a new franchise agreement was amended: in addition to hiring the attorney, the council will hold neighborhood meetings to find out how the public feels about their cable service.

Councilman Morris brought up a good point, too — technology has changed dramatically in the past twenty years, and technological change isn’t getting any slower, so we probably shouldn’t renew for twenty more years. In fact, Randy Ray has already indicated he’s hoping for a shorter term. Morris also pointed out that Insight doesn’t just offer cable TV anymore, but also internet access and even phone service in some communities. How will a new franchise agreement affect these additional services, if at all?

Also, we know what the city wants to get out of a new agreement, but what does Insight want? I’m going to go out on a limb (ha ha) and guess a lower franchise fee. The city used to collect 10% of their (then GE Cablevision’s) adjusted gross revenue until the FCC decreed in April 1981 that franchise authorities couldn’t collect more than 5%. The franchise fee now is still 5% of Insight’s adjusted gross revenue, payable monthly. Back in 1986, they (UA Cablesystems at that time) tried to get Peoria County to agree to a 3% rate, but the County told them if they wouldn’t give them the same 5% they gave the city, they could remove their equipment and get the heck out of town. So UA backed down and passed the higher cost on to the subscribers.

My guess is they will argue that they face increased competition from satellite providers like Dish Network who don’t have to pay local fees, and need to have the franchise fee lowered so they can keep their prices competitive. I expect they’ll ask for 3% or less.

I’ll look forward to hearing the public input. What’s important to you? How do you feel about Insight’s service? What do you think needs to be included in the next franchise agreement?

* * * * * * * * * * * *

And now for a little history, for those who might be interested:

Peoria has only negotiated two cable franchise agreements. The first one was awarded in 1966 to General Electric (GE) Cablevision for twenty years. At that time, cable television was a hotly debated topic locally and nationally. Broadcast stations didn’t like it, worrying that bringing in stations from other cities would draw viewers away and hurt their ad revenue. The FCC muddled through all kinds of different regulations, worried that pay TV would “siphon off all the good programming from free TV.” Thus, even though the franchise was awarded in 1966, GE didn’t start offering cable television until 1972 because, until then, the FCC prohibited cable companies from piping in channels from other cities (e.g., Chicago). GE figured people wouldn’t pay for exactly the same stations they can get for free over the air, so they waited until they could offer extra channels like WGN.

The franchise agreement was transferred from GE to UA Cablesystems. They renewed in 1986 — that’s the second and last franchise agreement Peoria negotiated. I got a copy of it through a Freedom of Information Act request, and I converted it to digital form — as long as you have Adobe Acrobat Reader ver. 5.0 or greater, you can read it here. What do you think? Are they living up to their agreement?

The agreement is somewhat entertaining to me, just because of how much times have changed since 1986. Consider, for instance, what you remember about 1986. I was a sophomore in high school then, and not many people had personal computers compared to today. It was the year of the Challenger disaster, as well as the Chernobyl nuclear disaster. Reagan was president. We were watching Ferris Bueler’s Day Off and Family Ties while listening to Take On Me by A-ha on KZ-93. The cable franchise agreement looks like it was typed up on a typewriter instead of a computer (it probably was). At that time, the city wanted the cable system to have a capacity of a whopping thirty channels initially — and they wrote in the agreement that they wanted it upgraded to 52 channels after ten years.

In September 1986, UA Cablesystems was bought out by Tele-Communications, Inc. (TCI). It was TCI Cable for about twelve years. Then in October 1998, TCI merged with AT&T Consumer Services (ACS). But, it wasn’t long before the franchise was transferred to Insight (December 2000). Insight is now the ninth largest cable operation in the U.S., with 1.3 million subscribers in Illinois, Indiana, Kentucky, and Ohio. They brought in over $269 million in the first quarter of 2005. Their home office is in New York.

So they have ample capital for waging war on franchise agreements. Galesburg also uses Insight for their cable provider. If this article from The Zephyr is at all accurate in describing their negotiations (I have no way of verifying it, so I can’t vouch for it), then Randy Ray and his new cable attorney better be on their toes whenever the contract comes back from New York with revisions.