Spotlight: The true benefits of a water buyout
By Tom Fliege
Peoria Journal Star Letter to Editor
May 28, 2017
Last October, a committee of the CEO Council presented to the Peoria City Council a study of the city’s option to purchase its water service.
We sought to clarify a very complex issue without resorting to the politics and personality assassination that has marked this issue in the past.
The due diligence we brought to the table was designed to get a close approximation of whether exercising the city’s franchise rights would benefit our community — nothing more, nothing less.
The reason we had to do the study is because Illinois American Water Company (IAWC) will not release analytical information on the Peoria Water District unless the City Council exercises its option first — a true “Catch 22.” Our study was designed to help the Council make a knowledgeable decision.
The facts we found were shocking. Peorians pay more than twice the national average for water. Of the 16 cities — nine in Illinois, six in other states — we surveyed, we pay more than all except for one IAWC community also looking into municipalizing its water service. We pay more than double what Rockford, Joliet and Springfield — all municipally owned, all unionized work forces — pay.
In a recent Forum letter, an IAWC official claimed they paid over $5 million in taxes. What does that tell you about their revenue and profits? That revenue stream and resulting profit could be a very significant resource for our over-taxed community in the years to come — if we choose to access it.
Because we pay so much for water, if we can arrive at a fair price, we estimate conservatively that the city should be able to buy the Peoria District of Zone 1 of IAWC and:
• Continue the same quality water service with no significant increase in rates or taxes;
• Continue paying labor the same or better compensation;
• Regularly contribute up to $3 million per year to the city treasury;
• Retire the debt over 25 years;
• At bond retirement, begin contributing $15 million-plus per year in today’s dollars to our city treasury.
Had the City Council made this decision 30 years ago, the recent increases to four different taxes would not have been necessary. This is money that should be going to our streets and schools, not to corporate profits.
Some 85 percent of Americans get their water from municipally owned water companies. What do they know that we don’t?
Ask yourself: When was the last time you saw a group of 65 business leaders seeking to make public a private business? Why would they make this recommendation unanimously? Something must be up.
The water company loves its “public surveys,” which can be manipulated. We want a Council vote, based on an educated public’s input.
Thomas D. Fliege is senior area vice president of Arthur J. Gallagher & Co. and a member of the CEO Council. He lives in Peoria.
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