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"Ever wonder if City Council is as contentious and chaotic as it is sometimes portrayed? Here you can get a progressive perspective on some of the issues from someone who spent four years in the trenches. Totally unbiased, though! Feel free to comment but keep it respectful, just like they do at council."

Wednesday, October 26, 2011

Public engaged, EPCOR jilted

It became quite clear well before the council meeting on Monday that EPCOR’s advances to London Hydro would be rebuffed, if not by Hydro, by Hydro’s sole shareholder, the people of London. As soon as word of the “cooperative” arrangements became public, the public began to mobilize.

Councillors received emails and phone calls and were stopped in the street.  Within hours, a hastily created Facebook event attracted 76 acceptances to attend the council meeting. Invitees were urged to assemble early in anticipation of a crowded public gallery.

And so it was. Although there were still a dozen or so seats available at 5 p.m., by the time the EPCOR item came before council, the gallery had reached its capacity and access was blocked, although one latecomer noticed property owner Shmuel Farhi ducking under the cordon undetained. Eventually, a scout troop awaiting a photo opportunity was convinced to leave the gallery in favour of accommodations on the council floor. Still, it was standing room only.

The mayor knew he had a rebellion on his hands. He moved the discussion on EPCOR forward on the agenda in hopes of dispersing the crowd as soon as possible. It was a good decision.  Paul Hubert presented the motion. He had moved it at committee and now, since committee vice-chair Judy Bryant was absent, he also got to present the report.

The mayor started off the discussion. He was aware of the allegations of behind the scene deals and the media frenzy. He wanted to assure everyone that nothing of the sort had happened. “Nothing stinks,” he averred.  As soon as the letter from EPCOR expressing interest came, “we wanted to make it public.”

He noted that back in June or July council wanted to look at delivering services in the most affordable manner and council agreed to look at a shared utility model (incorporating hydro with water, waste water, garbage collection and parking). Some guiding principles were agreed upon. Then, lo and behold, another city utility came forward and requested an opportunity to present to the committee. It wanted to enter into discussions with the city. That’s all that was being proposed. But given the reaction in the media and the public, he suggested an amendment to the motion: to table the motion until after the report from staff on the shared utilities model came before council.

A motion to table is not, of course, an amendment. It leaves the main motion intact. It is also not debatable, as the city clerk pointed out.

Fontana was chagrined. It had not been his intention to stifle debate. He had weighed his options of referring the matter to another committee or  postponing to a later date but had not checked out the Council Procedure By-Law. Tabling is not debatable and while a motion to postpone to a certain date may be debated, the actual motion being postponed may not be debated.

These are matters to investigate before you get into the public debate. Procedural wranglings are rarely entertaining, nor do they enhance one’s credibility. Fontana suggested amending “table” to “defer”.

At this, Nancy Branscombe took the floor. She wasn’t interested in deferring or tabling. She would never support an exclusive agreement. She would not ever be interested in looking at that. She was shocked it had come forward with no report from staff and no consideration by Committee of the Whole. When the Mayor tried to interrupt, as is his wont, she would have none of it. “Don’t argue with me,” she bristled.  “I have the floor. “

This drew enthusiastic applause from the gallery and another burst followed Bill Armstrong’s observation that the message from the public was that “Hydro is not for sale.”

The clapping and cheering did not please the mayor. He chided the audience on its deportment and requested that it respect the decorum of the council. At this, a few snickers could be heard in the gallery but the applause subsided, although it broke out again from time to time in a more restrained fashion.

Next up was Joni Baechler. She acknowledged that there had been discussions about utilities models in general; what shocked a number of members of the Finance and Administration Committee was the request for exclusivity and confidentiality with an outside agency when there had not even been a decision about a utilities model.

Baechler is noted for doing her homework, and she did not disappoint on this occasion. She pointed out that EPCOR is interested only in water and hydro, that there is no oversight by city council, it can set up subsidiaries. Recently, it identified the Alberta tar sands as a major area of opportunity for its water business. Its president and CEO took home $2M in salary and bonuses, and board members received up to $100K.

When the Mayor attempted to interrupt this recital of information, Baechler responded with “I hope you wouldn’t editorialize when I have the floor,” and then resumed her account. Edmonton may have received big dividends , but only last July, hydro rates in Edmonton had increased by 45%. Edmonton has the second highest utility rates of all major Canadian cities. So who pays these high dividends? It’s the ratepayer through its water and hydro charges.

“If we need money for projects, let’s be upfront about it,” she concluded. She agreed with Branscombe that council simply receive the report and reject the recommendation to enter into any discussion with EPCOR.

Even Sandy White, one of the mayor’s most ardent supporters, was not convinced. “This doesn’t sit well with public,” she observed, “and I guess you figured this out by now.”  This drew some chuckles from the gallery. White proposed to come to the mayor’s rescue but he said he didn’t need it. “Okay then, I’m not going to help you,” she declared. She would just vote down the motion.

Hubert decided to save the day. He had originally put the motion forward, but it was obviously not going anywhere. His hope, he indicated, had been to fast-track getting information on the shared utilities model, information that only EPCOR might have.  He suggested amending the second part of the motion by replacing it with a statement that reaffirmed council’s commitment to the principles it had outlined at the time of agreeing to look into the structure, benefits, and costs of a shared utilities model.

What these principles were was not clear to the gallery and seemed to be a source of confusion for the council members as well. It was also not clear how a reaffirmation of a previous decision constitutes an amendment unless it is actually appended to the original motion. In this case, the amendment was intended to actually replace the original motion, or at least the second part of it. Why not simply vote down the second part? Could it be that there were egos at stake?

“Just say 'take no action',” suggested Harold Usher. He pointed out that EPCOR was interested in making a profit and the only way to do that would be to raise rates or cut staff. He wasn’t interested in either.

But finally, Joe Swan came to the mayor’s defence. “ I don’t think I’m going to abandon you in your time of need,” he assured him. “The mayor is trying to knock over a couple of dusty water bottles to find a way to have cheaper services. Ontario is crushing 60-70 utilities into 7 or 8. We need to find what is right for London.” Since London Hydro is the seventh largest utility in Ontario, why would it be crushed, I wonder.

He then lashed out at “those who go on radio stations trying to scare the living bejesus out of the public,” clearly a reference to Baechler who had appeared on several radio stations. “It was council that invited Mr. Lowry (of EPCOR) in,” he continued citing the Shareholders Declaration, bylaw 2 which I had fought against unsuccessfully during the previous term of council. He accused unnamed individuals of “trying to wind up the community” and “fear mongering”.

“We can’t stick our heads in the mud and hope the big bad world will go away,” he concluded.

On a point of privilege, not granted but taken anyway, Baechler pointed out that to tell the community what is going on is not fear mongering.

Also coming to the defence of the mayor was Steven Orser. “Give the man a break,” he urged. “He’s trying.” He pointed out that the mayor had attended more than 400 functions in the past year, although other reports suggest a figure closer to 800. There is no denying that the mayor has been a busy man. He’s everywhere.

Orser wanted to give it a try. “Could we become the EPCOR of tomorrow?” he asked rhetorically.

“Not from what I’m hearing right now,” responded CAO Jeff Fielding drily.

That was about it for support for the mayor. Even those councillors he could usually count on had reservations. Dale Henderson, who had originally seconded the motion, believed that EPCOR was after our assets. “Tell staff right now we’re not interested in selling the assets,” he directed.  Denise Brown was being accosted on Wortley Road by residents who didn’t want to sell any part of London Hydro. She wondered how much the report on the shared utilities model would cost. When told $200K, she replied that she didn’t see the point if there was no willingness to sell any part of the utility.

That set off Sandy White who couldn’t believe her ears. Although she had already spoken, she suggested that the money could better be spent on the Glanworth library. 

Did anyone pay attention to this issue when it was unanimously endorsed?

Fielding informed them that when council members had decided to go from a 2 to 3% yearly increase in the tax levy to zero, they changed the parameters. You can’t maintain the services on zero. So staff was looking around for ways for council to find some extra money. This was one possibility. Back in March, EPCOR had been in town at the request of Stantec which had been working with CASCO. That deal hadn’t worked out, but it had put EPCOR in touch with London Hydro. According to an interview with the London Free Press, EPCOR had been” given the impression the city had thought these things through and was ready to have these conversations.” 

But where that impression come from? Why did EPCOR think London was ripe for the picking?

Bud Polhill tried to make a half-hearted defence of the original proposal. He didn’t think we should sell Hydro, he claimed, but maybe we could save money on the operations.

It was too little, too late. Fontana was not a happy man. He pointed out that the original motion was only to talk. We need to save money, he said, and our current rate increases are too high. “We are carrying $100M debt (on water and wastewater). If we want to call ourselves the city of opportunity, P3’s (public-private partnerships) are the way of the future.” A groan from the gallery suggested he wasn’t scoring many points.

Paul Van Meerbergen had remained unusually silent. Now he simply wanted to wrap it up and receive the presentation

White tried to comfort the mayor. “Come on, Mr. Mayor. Don’t be mad at us. I am on your side.”

Nevertheless, in the vote that followed, she joined other council members in simply receiving the report. She didn't, however, join Henderson and Van Meerbergen in voting against re-affirming the principles that council had previously adopted unanimously with respect to the shared utilities model.

Following that vote, Joe Fontana declared that council had just re-affirmed its commitment to a shared utilities model, a misstatement that he quickly corrected, when it was it was drawn to his attention.

But I doubt that we have heard the end of mergers, acquisitions or sale of our public utilities.


Rockinon said...

Excellent post. Very informative. Thank you.

Colin Hendry said...

Gina: Sometimes we get it right. A lot of years ago, a Londoner and visionary, Sir Adam Beck adopted an idea which has endured in our treatment of electric utilities. We have tried to mess it up by adding recreation and sewage to the mix, from time to time. Not this time and not with a profit motivated western group which gathers money onto itself. It is too easy to become submerged in the paperwork and demands of running a democratic-based city, in this case someone put out the wakeup call just in time. Colin

Anonymous said...

#1 It is still not clear who had the bright idea to bring Epcor in to talk to the cte. Surely it was not a council motion. The mayor seems to be cutting deals without telling his "supporters" on Council. #2 I would be interested in knowing where Swan gets his info about the province wanting to merge utilities. Sure didn't come up in the campaign. And with a minority gov't, don't bet on it. #3 Stevie O - what the f does going to 400 photo ops have to do with trying to cut a deal with Epcor without any public or council consultation? Talk about blowing a smoke screen for your man.

Anonymous said...

If London took a half payment of stocks and half cash from selling London hydro, city hall would be issued dividends from the stocks. If the stocks gain value London could also gain from that by selling some of them. Also, stocks are perceived as an asset and when their value increases so does London's borrowing abilities. When stocks decrease, we just wait it out, there will not be any margin calls. Extra money if put in the right places eg.entertainment for EVERYONE equals a growing city capable of retaining homeowners.

Anonymous said...

I see absolutely nothing wrong with councillors Swan and Orser becoming shoe-shine boys and apple polishers for our esteemed mayor.

Three has always been a magical number throughout both history and popular culture.

The success of the greatest comedy team of all time -- The Three Stooges -- is something we should never lose sight of.

Larry -- Joe Swan
Curly -- Steve Orser
Moe -- Joe Fontana

London needs to support local talent.

In the Know said...

You want to tell me how putting money into entertainment (i.e. JLC) has resulted in "retaining homeowners?" And by the way, the city already gets dividends from London Hydro in an amount that reduces your taxes by 1% per yr. And 10 yrs ago, when some on Council wanted to sell to Enron, with your approach, the city would have been wallpapering the Mayor's office with worthless shares.

Dean Sheppard said...

Super recap Gina. I was there and you captured all the highlights and most interestingly the lowlights too. The London public is lucky to have you providing such valuable, digestible insights into a process most find baffling and impenetrable.

Robert said...

As Dean said: Super recap.
I was there and you covered everything in a great blow by blow discription. Howard Cosell would be proud of you. The only thing missing was the video, but I think Rogers and A Channel must have cought that. I can't wait for the movie to come out. I think Anomyous has pretty well nailed the three main actors to play the leads.

Anonymous said...

I was watching the proceedings on the TV. Given the mayor's fumbling due to ignorance of proper procedure contrasted with Councillor Baechler's masterful presentation, I found Joe's angry and pathetic cry, "I wish you guys would do your homework!" hilarious.

anon one

Anonymous said...

@ in the know.... #1 entertainment on the 401 eg. Indoor waterpark, super casino, large indoor mall etc. On the 401 so Londoners AND passersby could use them. #2 ... 1% dividend and no hope for a way greater pay out is wasteful, when electricity prices go up everyone will wish they had a lower rate and point fingers. #3 if epcor goes bankrupt, London could have a clause that puts us in line to buy london hydro at a predetermined discounted price to counter the loss in share value.