- Larry Mitchell, Senior Fellow, Frontier Centre for Public Policy
Prairie water was once described by someone obviously familiar with it as “too soft to walk on but too hard to drink.” That quip came to mind recently in witnessing the raging debate over Winnipeg’s water. Some critics find it hard to swallow a plan in which the City of Winnipeg proposes to put all of its water and wastewater operations into a stand-alone utility company.
There are, however, some important points that need to be emphasized during this discussion, which should be of interest to all cities in Canada. The following observations come from the experiences in my home country, New Zealand. For the past 15 years, New Zealanders have witnessed a significant shift in the delivery of water services, using the methods proposed for Winnipeg.
The same general issues and tone of the present Winnipeg debate once raged in New Zealand during the widespread consideration of transferring water and wastewater services away from local government. Now, New Zealander's look back and wonder what all the fuss was about.
In Auckland, New Zealand’s largest city, Watercare Services Limited is a water and wastewater utility company owned jointly by several territorial local authorities. It is managed and operated by the company’s own expert staff. Its board is populated with businessmen skilled in running a corporation of this kind and who have had their performance objectives clearly set for them in a widely-consulted-upon statement of corporate intent.
In Hutt City, south of Auckland, their separate water and wastewater treatment plants, with their super efficient modern operations, contributed to the city in 2006 receiving the premier national Business Excellence award against all comers including the private sector.
There are a number of critical factors to consider during the public consultation, concerns which New Zealanders addressed before the changes occurred.
The first, the “clincher,” revolved around the issue of improved accountability arising from the separation of water services from the general activities of the city councils concerned. By placing the finances, asset management, funding and operation of water into a separate entity the true costs and performance results of these activities were clearly revealed. As well, all money raised for water supply and wastewater treatment could only be used to pay for and fund these activities.
Another positive result of the better management of water was its pricing. True costs, including funding of renewals and future capital works, were charged and it was remarkable to observe the emergence of widespread water saving initiatives that sprung out of these pricing signals.
Once the true costs of water became a subject of public interest, leak loss detection and reduction programs were quickly introduced. That reduced some water loss rates from as much as 20 per cent down to near five per cent. All of these savings were then reflected back to the consumer in lower prices.
Quality standards set were reached and response rates to emergency call outs improved markedly. All of this came about largely from the concentration upon and accountability for water services made possible because of the new corporate way chosen to deliver the services. Left within municipalities, water will remain just a staid, old departmental activity with little emphasis being given to its special place in the lives of city citizens.
In reaching a decision here in Winnipeg I trust that the waters will not be “muddied” with strident opinion that fails to acknowledge the potential and significant benefits that can arise from the plan to turn the utility into a stand-alone utility.
Larry Mitchell is a New Zealander though a Canadian by birth. He has over 30 years active experience of commerce, chartered accounting and, since the mid-nineties, an immersion in local government finance and policy practice.
