Water-Logged Buyout Resurfaces With a Bad Smell

Here is how I see the change of heart by a couple of city councilpeople and why this vote tonite will probably be against the public will:

1. The water company headquarters wants to sell because they believe they can walk away with up to $100 million in profit. I’ve heard that local manager Kevin Hillen is being transferred. He has not returned my phone calls and calls to Indiana were referred back to Mr. Hillen. (Mr. Hillen did call me this morning and sent me an e-mail. He had been out of town. He confirms his transfer and writes as follows: "his company did pay $312,000.00 in property taxes last year compared to $273,715 in 2001." He also says that they estimate they will contribute $112,000.00 to charitable-community-civic functions and groups in 2005. As far as our reinvestment, Mr. Hillen states "most of our capital budget is focused on replacement of existing facilities, such as services, meters, hydrants and mains. In the last two years, this has ranged between $4.5 and 5 million dollars annualy. When we get to a period that requires a new treatment plant or a new equipment, we could easily spend another 6-8 million annually."
2. Illinois-American announced an 8% upcoming price hike right before the council vote. Why would an intelligent company make themselves look bad if they didn’t want to sell? (East Peoria announced a possible 18% rate hike) Mr. Hillen said today that they did not announce a rate hike; he said President Gloriod when asked by the JS reporter, said "IA MAY ask for an 8 percent rate increase effective in 2007."
3. Mr. Manning means well but he is a neophyte in politics. Why didn’t he do his “due diligence” when he was run inning for office rather than wait to release his figures only days before the council vote? While Mr. Manning appears to know accounting, he may not understand how companies do “creative bookkeeping.” He certainly did not conduct a certified audit. Mr. Manning is a senior VP with a prominent brokerage firm and his company has many wealthy clients. You listen up when wealthy clients talk.
4. A brochure widely circulated by the city of Peoria states the following: “Since significant cost saving are expected, the result would be “lower rates.” What’s this??? Both Manning and the City Manager admit they will needs to RAISE rates 3% a year indefinitely. This means that the cost of water would double way before the 34 year bond is paid off. Any number of things could go wrong in 34 years!! This city mailing also says the city would make a 25% rate reduction to their consumers. 37.5% would go to renovating older neighborhoods and 37.5% toward infrastructure projects in growth areas. How could they be so far off??
5. Once the city buys the water company, the facility will no longer be under the control of the Illinois Commerce Commission. The City can do anything they want and charge anything they want. (I understand plans are being made to run a water line along Rt. 150 to Brimfield where PAAG member Rita Kress has extensive land holdings waiting to be developed.)
6. The city says they would own the water company but hire someone to run it. They believe they already have found that company with an extensive background. Question? Who found this company and what connections to prominent members of this community? The city says it would create a Water Resources Council who would oversea the daily activities of the company that would manage the company that the city would now own. Sounds interesting. Who would pick this committee and what carefully selected members would be the core that runs this committee? I’m betting the committee will be controlled by PAAG, the Chamber of Commerce and the Civic Federation.
7. The Chamber of Commerce announced today they throw the full support of their 1200 members behind the buyout. Many of these members do not live in Peoria City or County. Of all the calls to Chamber friends I made today, none said they were polled. Do you believe the C of C made 1200 calls??
8. If Manning’s figures prove to be wrong, no problem, just plan on paying more taxes for generations.
9. Under Illinois American, developers pay to hook up to the water main. Under the city it is planned there will be no cost to the developer; the city will pay this cost for the developers and the city will then pass the cost on to us taxpayers.
10. Sandra Birdsall is a power on the Chamber. She is also a power at Cullinan Realty. The ex- Diane Cullinan has extensive land holdings in Kickapoo Township. Expect the city owned Water Company to run water lines in the direction of her properties waiting to be developed..
11. Routing city water all around the county could put excessive strain on older lines which many believe to be old and in need of extensive repair or replacement. It does not appear enough money will be set aside if the infrastructure proves to be worse than the city believes. NO study of infrastructure was done according to my sources. Tied in with public water are public sewers. Expect the Sanitary District to be raising prices again.
12. PAAG lent the city approximately $880,000.00; this includes interest of 9% deducted. (This interest rate was later reduced slightly.) This contract will need to be reexamined but I believe all PAAG members will get all their money back with interest.
13. They drain on the water system could require another expensive deep well to be drilled, especially if we have continued drought in this area.
14. Illinois-American is unionized as would be the city employees. Those of us, who have dealt with unions in the private sector, know how much more the unions have been able to extract from the public sector. Expect wages and benefits to accelerate. Look at your current tax bill and see how salaries and benefits eat up more revenue than is actually spent for city services and infrastructure. My tax bill shows $240.00 for services and $408.00 for pensions.
15. Note Mr. Manning’s statement that profits gained from the city ownership “would go to the city.” Don’t count on any of it coming back to the taxpayer. There are always new projects to spend these “savings” on such as a new entrance into the expanded zoo, more Med-Tech infrastructure, more tax abatements to projects like Cub Food, the ballpark and InPlay and more TIF districts like Walmart and Menards. The City investment of $5,000,000.00 in the RiverPlex hurt private businesses as well as caused a cutback on PPD services. The RiverPlex losses will continue for many years. As in investor in the ball park where the City put another $5 million of your money, the club has performed so poorly that I can not even get any offer for the $50,000.00 investment I made 10 years ago. One Technology Plaza space owned by the County and promoted by Sandra Birdsall, has set empty for over a year as we have not been able to sell it or lease it.
16. The city will not receive any more property tax dollars from Illinois-American or any taxes and no more donations to charity.
17. According to city sources the vote is likely to be Grayeb, Sandberg, Van Auken, Gulley, Manning and Jacobs voting to buy the water company at an exorbitant price of over $220,000,000.00, all borrowed money. The actual cost of the water company will be around $420,000,000.00 including interest. (Less than 20 years ago Dave Ransburg estimated the water company could be bought for $60 million.)
18. Expect the final hidden cost to be somewhat higher than $220,000,000.00. Time has elapsed; attorneys and employees working on this project have to be paid. Personnel tied up in this purchase will not be counted as an “expense.”

This buyout is all about power, use of influence and greed. Who still in business today, has the guts to stand up to the Chamber, the Civic Federation, the PAAG members and the unions?

The referendum to not buy the water company meant just what the voter said. WE DO NOT WANT THE CITY TO GET IN THE WATER BUSINESS. THE CITY HAS TROUBLE TAKING CARE OF THEIR CORE BUSINESSES. The voter expected that Illinois-American was making a profit. They are supposed too!! Only the Socialists in our community expect the government to do all things; eliminating private entrepreneurship. If the city thought IA was charging too much, why didn’t they take this up with the Illinois Commerce Commission?? If the city felt the ICC was incompetent, why didn’t the take it up with their elected officials in Springfield??

The city says it is buying the water company for you the taxpayer and voter. No, they are doing this to try to dig them out of a hole that will eventually prove to be quite large. Do not expect them to stop spending more than they take in. Expect higher taxes like garbage taxes, property taxes, higher assessed valuations taxes, sales taxes and every other type tax that can be legally be assessed. Buying the water company will not reduce your costs. The city already has said expect a 3% rise annually for your water bill. Also, the city may declare a "special assessment" at any time to handle further expansion in the county as the city has the ability to annex more property to the City of Peoria.

For people like us who live in the city, expect our property values to remain stagnant or decline while our assessed valuations and property taxes keep rising. Expect City and County services to be spread thinner and thinner or expect more people to be hired by the government while our population grows in single digits for the next decade. The realtors have already locked out the discount brokers in Peoria so expect the 6% paid by the seller to continue indefinitely further reducing the selling price of your home while the assessed valuation only goes up each year.

This whole water company buyout stinks but by the time the voter finds out where the smell is coming from, it will, as usual, be too late. However, their will always be more elections. We grassroots people need to encourage the right people to run.