As my letter from Illinois American Water indicated, the council will be taking up the matter of whether to buy the water company at their Oct. 28 meeting.
Included in the council communication are (1) the March 1, 2005, letter of appraisal that set the value/purchase price of the Illinois American Water Peoria District at $220,000,000, and (2) the City’s Water Company Acquisition Financial Analysis. The financial analysis estimated that 2006 revenues would have been $29,360,000, based on actual revenue information acquired through the due-diligence process at that time. It also estimated that an operations contract to manage the water company would cost about $11,000,000 in 2006, increasing 3% each subsequent year.
The analysis showed that the water company would pay for itself — i.e., taxes would not have to be raised to cover the debt service — and water rate increases would only be 3% per year. Under this scenario, sufficient funds would be set aside for capital improvements as well.
Of course, things have changed since 2005. A new analysis would have to be done, as well as a new appraisal. According to the council communication, due diligence could cost as much as $2 million, and the city could find that it now can’t afford the water company when all is said and done.
Mayor Ardis is quoted in the paper today as saying, “To me, it will be very difficult to justify spending $2 million to do due diligence on this under the current budget constraints…. I don’t think that is a priority.” Ardis voted against the buyout last time, also.
Also of interest in the Journal Star’s article are some preliminary numbers from Illinois American Water Company’s telephone poll:
Company spokeswoman Karen Cotton said the research shows that of 400 registered voters in Peoria who were polled, 55 percent strongly opposed a city-backed buyout of the waterworks, while 89 percent believe City Hall has higher priorities.
In a 2005 referendum, 82% of voters were opposed to the water company buyout. Depending on how many were “somewhat opposed,” we may find that opposition is softening.
It is always a mistake to NOT own your own water. Why should Peorians send their water profit to Voorhees, NJ and to Essen, Germany? Is it that you like to feed American Water’s and RWE’s profit stream?
Keep your money in your community and do not let them to continue to feed you their flawed survey data. For instance, take a look at the following excerpt. I would ask the company to show you their complete survey and the complete results, not the portions they divvy out.
Also of interest in the Journal Star’s article are some preliminary numbers from Illinois American Water Company’s telephone poll:
Why should a community own its own water works? Here are some reasons why:
Read this: http://www.foodandwaterwatch.org/water/private-vs-public/reasons-water-privatization-fails
And this: http://www.foodandwaterwatch.org/water/private-vs-public/corporations/reasons-locally-owned-water-benefits-consumers
I was called by that survey-they began by disguising their interest by making it look like something else; then finally I told the lady “you are doing this for the water company aren’t you?”, she laughed and said yes. Then questions about Mayor Ardis were asked, then about the Council and I wondered what that had to do with the main issue, i.e., the Water company. A skewed poll if there ever was one, but one we will hear about in the future.
For a city to own a water company is normal and probably under most normal circumstances good policy. Water is normally provided at cost. If you paid attention, last time around, the motivations for buying it seemed to have little to do with providing good water service at an affordable price. Instead it smelled more like an effort to generate more revenue streams for non-water related projects and create more shells to hide taxes under. I don’t think the public trusted the city council at that time to act as good stewards in the purchase or operation of the water company.
WHEN THAT REFERENDUM WAS PASSED, THERE WAS LITTLE INFO AVAILABLE ABOUT THE WATER COMPANY. THAT CHANGED AFTER A LOOK INTO THE BUSINESS OCCURRED.
Mahkno: “I don’t think the public trusted the city council at that time to act as good stewards in the purchase or operation of the water company.” What is your thinking now about the public trust of the city council on this issue?
Just the fact that Illinois American Water is trying so hard to make us think that we should NOT buy out our water company makes me feel we should DEFINATELY buy out our water company.
A profit on water sales on a business run as a public enterprise.? No public enterprise run by the city, county, park or school district in Peoria County has come close to breaking even, let alone a profit?
Refresh my memory and name one.
What profit is the private water company making? The company has been up for sale , JS on 11/05/05 ” European utiity plans to unload all U. S. properties”. Why didn’t PAAG but it? If it’s aso profitable why hasn’t ANYBODY bought it by now? I believe the “foreign” company would sell it to the city if the price was right,
Read my recent blog on the buyout proposed years and ago and at least one of my older blogs dated 11/05/5.
Obviously, THIS council agenda proves how lucrative the (local) water company’s profits must be since Peoria and surrounding communities continue to pursue it’s acquisition. Never mind, that the City needs to spend hundreds of millions of dollars for a new storm sewer system.
If BOTH the water company buyout and storm sewer replacement are undertaken, that’s half a billion dollars. And, YOU thought your property taxes are too high already? (laughter) Just wait!
So, Peoria, what position do you hold at Illinois American Water? 😉
It seems more doable to hold one’s elected officials accountable than some corporate board in another state or country.
Remember, we have elections where voters can send unworthy public servants out to pasture.
Voters can also retain the same unworthy public servants.
Precinct Committeeman,
You are killing me here! Are you on a sugar buzz?