Friday, January 19, 2018

Water Logged (4) March 25, 2005


Water Logged #5

Note the date of this blog.

Since the subject is coming shortly before the City Council, I invite those interested to read my successful efforts in 2005 or 13 years ago. I studied the arguments from various sides and again came up with the same conclusion I did 13 years ago. Much of the information in  the news today, comes from wealthy people who would benefit if the distribution of the nationally owned water in Peoria was removed from the jurisdiction of the Illinois Commerce Commission and would move to a small group of people controlled by the City Council but influenced by many of the same people who are suing the City of Peoria for around 1 3/4 million. This group appears to led by Rita Kress, a wealthy landowner from Brimfield and Dianne Oberhelman, also the wealthy husband of Doug Oberhelman, former CEO of Caterpillar. The Oberhelmans and Mrs. Kress are reputed to own large chuncks of farmland which they would like to convert to housing. Problem is that American Water Company has shown little interest in running water to these sites. If the City of Peoria, now out of the jiurisdicion of the Illinois Commerce Commission, and now was the water company and knowing some members of this council, this sprawl of Peoria building further out would most likely continue.

One misleading statement printed at least twice in local media, claims that 83% of communities own their own water companies. This a necessity for small communities who find no buyer as they are too small for a buyer to make a profit.  Small communities make up the vast majority of communities across the nation,

Here is a headline that appeared in the JS on March 6, 2005, right before the Council voted 6-5 NOT  to buyout the water company. The headline read, "Buyout May Require Rate Hike". The author of the article was the City Manager of Peoria reading, "It would take about a 3% ANNUAL increase in water charged to area consumers to sustain the cost of the City to buy the water company".

To my knowledge two of the leading members of PAAG, do not live in the City. It is also known that Bud Grieves former Mayor of Peroria who does not live in even Peoria County to my knowledge, is a strong supporter of the buyout.

To get the names of the wealthy people of this area who have been suing the City of Peoria for around $2 million the city doesn't have, read my old blogs found mostly under the titles 'Water Logged' or water related headings. About 10 blogs in all.

(All of the aproximately 3500 blogs and posts are available by typing in what you are searching for in the 'search bar' slot in the upper left hand corner of any blog).

Oppose a referendum; referendums cost taxpayer dollars, until all facts are in. The last one showed 83% of the voters OPPOSED the buyout.. They felt that the City had it's hands full without owning a water company as show by the Peoria County's disastrous ownership of Heddington Oaks. Riding our infrastructure is little short of disastrous. My estimate to bring the infrastructure up to 75% of normal would cost in the neighborhood of $1 billion. Buying the water company with borrowed money could send this County into eventual bankruptcy.

Projections are anybody's guess, No projection of any major project usingg public dollars has met their projection since RT. 74 divided the City.

The wealthy want another due diligence study similair to the 2005 one they have been being suing the City for the past 12 years. I undestand a decision by a Judge will finally be made. Decisons can be appealed, etc., etc.

All info on this page is attrbuted to Merle Widmer Founder of Widmer Offices and 10 year County Board member.  Now back to my blog of 2005.

Last night, I attended the LWV and Peoria Chamber of Commerce sponsored forum which allowed a dialogue with audience involvement of the proposed city buyout of the Illinois-American Water Company. The pro buy side was represented by PAAG representatives Sandra Birdsall and Terry Kohlbus. Illinois- American was represented by their president and two other officers of the company, all from the United States. Throughout the meeting questions tailored for city officials to answer were not asked because there was no one in the audience to answer these questions. The JS said today that Jim Ardis and Gary Sandburg were there, but evidently not during the question and answer period. Jim Ardis , Patrick Nichting and Bill Spears have spoken in opposition to the buyout oppose the buyout as have city council candidates Barbra Van Auken and Bob Manning. Gary Sandburg and John Morris probably can not state their positions as they are on a special committee to present their finding and recommendations to the full City Council.

Both sides ably presented their positions. There was actually no way to factually prove this proposed purchase might not turn into a large liability to the City of Peoria taxpayers or turn into a cash cow for the city, because figures presented by both sides were often in conflict.

A PAAG representative said it was simple as oil and gas, (probably forgetting they don’t mix), saying that across the sea, oil companies owned the oil and gas we buy from them and we don’t want “foreigners” from across the sea, to own our water. Actually, all the water in the United States is owned by the United States and can only be mined and sold by whoever buys the right to do so. Peoria’s water company, owned by a German firm, could have been bought by any interested company in the United States starting back in the late 18 hundreds. Ownerships of any entity changes hands many times in a lifetime. Water companies are no exception.

As I’ve said before, “foreign” ownership is welcomed by our governments. Seems to me a lot of financial benefits were given to a Japanese auto maker in Bloomington-Normal; a company Peoria was trying hard to land, offering this “foreign” company financial incentives if they would locate closer to Peoria. In short, our Economic Development people welcome anyone that wants to locate in the Peoria area and employ people. Probably 20 firms in Peoria have plants or distribution centers in “foreign” countries. And many “foreigners” own huge chunks of land in our country so “foreign” ownership is hardly new in the world.

The price of $220 million will probably grow to $240 million before the buyout is concluded. The City of Peoria has already spent over $2,000,000.00 on this project. It is time to move on to running the core business of cities’ and ownership of water companies should not be our cities’ core business. Many cities already own water companies and many wish they didn’t but can’t find a buyer who wouldn’t raise existing rates. Many cities are too small for private businesses to be interested as there would not be enough profit incentives. Many of these cities started out with public ownership, Peoria didn’t.

What is wrong with making a good profit? Caterpillar does and the PAAG group that lent the city a million dollars at 9% interest must have made good profits or how could they risk a million dollars? Were they counting on a city council that would give special treatment to their desires? I believe they actually thought they could save money on their water bills forgetting that few public ventures are handled more efficiently than the private sector.

Public entities in Peoria have a poor track record when it comes to making a profit and the most recent public entity to not meet their projections is the RiverPlex, which was projected to make to make $187,953 profit in 2004, instead has lost approximately $6,000.00 a day thru 12/31/04. And many public dollars and other taxpayer paid incentives were given to a new ballpark that has not yet met projections.

The PAAG and their supporters believe city ownership would solve many of the cities financial problems. Most people disagree as I believe the referendum will show.

One reason for the poor turnout last night is that 80% of the people do not want a change in water company ownership, and many also believe that if changes are not made on the city council in this election, their opinions won’t count anyway. So why show up?

If the city does buy out Illinois-American, the city would hire a private profit making company to run the water department. Would it be low bid or by special interest? How much would it cost? Who would handle the advertising and who would stand to benefit from the advertising contract? Too many unanswered questions. A business plan supposedly has been made up. How outdated or updated is it? Would the PAAG and the Mayor make it public for all taxpayers to see?

Are rates in Peoria too high? On 3/8/05, the JS quoted City Manager Randy Oliver as saying, if the city bought the water company, rates would probably go higher. Hmmmm.

Illinois-American pays approximately $300,000.00 in property taxes each year and donates another $100,000.00 to local projects. They are good citizens with us. Let’s keep them!!

Water Logged #5

Last night, I attended the LWV and Peoria Chamber of Commerce sponsored forum which allowed a dialogue with audience involvement of the proposed city buyout of the Illinois-American Water Company. The pro buy side was represented by PAAG representatives Sandra Birdsall and Terry Kohlbus. Illinois- American was represented by their president and two other officers of the company

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