What will the secret EPCOR negotiations cost us?


Shady dealsI was reading about the failed attempt by EPCOR – an Edmonton-based, for-profit corporation – to purchase half of Innisfil’s Power utility (InnPower) last year. Back in Sept., 2015, there was a story in the
Barrie Examiner that noted:

INNISFIL — Town council has approved the sale of 50% of InnPower (formerly Innisfil Hydro) to Edmonton-based EPCOR to create a new ‘strategic partnership’.

At a public meeting to discuss the sale (remember public meetings and public engagement? Those are processes you got last term… this term it’s all about secrecy), PowerStream’s CEO, Brian Bentz commented on

…the “exclusivity clause” in the EPCOR offer, which precludes consideration of other deals for a period of six months…

EPCOR, you may recall, is currently trying to buy the town’s half of Collus-PowerStream. The administration has been negotiating behind closed doors with EPCOR for the better part of a year. Earlier this year, the administration signed a deal to start the buying process. Is there a similar clause in the agreement with Collingwood?

In Innisfil, the public was given a chance to openly comment on the proposal (an event unlikely to happen here in Secretive Collingwood under The Block). Former Innisfil mayor Barb Baguley spoke out about the process (Barrie Examiner):

During the open forum portion of Tuesday night’s meeting, former Innisfil mayor Barb Baguley took exception to the town even considering such a partnership for water and wastewater services and questioned why residents weren’t better informed about the potential partnership discussions.
“The issue of selling any part of it is something I’m really concerned about,” she said. “My question is, if you are going to sell the safety of water and the protection of Lake Simcoe with wastewater treatment, shouldn’t we be talking about that? Shouldn’t we be having a conversation with the public?
“I’m not sure if it’s good or bad. There’s not enough information for people to make a somewhat educated opinion,” she added. “It had not come out that clearly…”
“I don’t think we have to know every paragraph in a contract. We need to know the intention and why we need to do this,” she said. “I’m not saying I’m for or against (a water and wastewater services partnership). I’m saying I don’t understand.

At least the residents in Innisfil were given the opportunity to ask questions and make comments. Nothing like that has happened in Collingwood, although the discussions here have been going on behind closed doors since January 2015.

And look the whole public engagement Wasaga Beach has gone through over the sale of its utility this term: open, active and transparent. The complete opposite of what Collingwood has done.

Another story in the Barrie Examiner, April 13, 2016, has this paragraph:

The town and InnPower would have been required to warrantee InnPower’s financial statements, tax position, employment arrangements, contracts and environmental liabilities, up to 35% of the purchase price, with a $10-million penalty if either party walked away from the transaction after the agreement was signed.

That made me go “woah!” A penalty after signing an agreement? The Innisfil story made me wonder, what penalties has the administration locked Collingwood taxpayers into, with this deal? Will taxpayers be on the hook when the EPCOR deal falls through? We’ve already spent more than $1 million of our tax dollars on legal and consulting fees to get this far. how much more will we have to pay to get out of it?

The InnPower deal collapsed in spring, 2016 when Innisfil Council started to read what they were signing.  As the story continues,

…the process was halted after council and InnPower realized that they couldn’t come to an agreement with EPCOR on water, wastewater and power.

But there was more, as noted on Simcoe.com in April, 2016:

Part of the proposal called for Innisfil receiving a $3.5 million finder’s fee from EPCOR once it invested $75 million within town borders.
Reynar said that would mean selling shares in InnServices to EPCOR since there were no investments of that size available through an InnPower deal alone.

A “finder’s fee”? In other words, Innisfil wasn’t going to get the promised $22 million until long after EPCOR had taken over its portion, and not until it invested $75 million in the region. Which could be years away. Could be never. PLUS, the utility had to pay $150,000 in legal fees and another $150,000 to upgrade its offices to accommodate EPCOR (see here). As noted in the Barrie Examiner, that investment was…

…likely to take five to 10 years, and expected to involve further partnership with InnServices, the new town corporation established to handle water and wastewater municipal services

So if I read it right, that wasn’t solely EPCOR’s investment, but required money from Innisfil’s water and wastewater utility (which EPCOR meant to take under its wing with the deal). And that means money from the taxpayers and service users. If anyone thinks this is a benevolent corporation bent of philanthropy, disabuse yourself of that notion. They are a for-profit business and they make money doing this – money that comes from the people who use their services: homeowners, businesses, industries.

Innisfil council apparently didn’t know about this payment, and wasn’t very happy to learn about it in the 11th hour. The story continues:

Coun. Stan Daurio said selling half of InnServices to EPCOR was a “poison pill” that most councillors refused to swallow once they understood the ramifications.
“It wasn’t disclosed to the hydro board or the council. It was withheld from us,” he said. “I don’t know why we didn’t know a year ago.”
Daurio credited CAO Reynar with finding a clause in the proposal that “was never disclosed” to council.
“He found this poison pill. For that my hat is off to him,” Daurio said. “What a relief that we were finally able to recognize that there were so many areas that we had poor information on.”

Will Collingwood be tied in to EPCOR for our municipal infrastructure financing if the deal goes through? That’s one way they get their profit (read the 2015 EPCOR proposal here for Adjala-Tosorontio). The 2012 financial report for EPCOR shows $25 million received from such financing, and $38 million in 2011. In 2015 it was $21 million and $14 million in 2016. That dwindling revenue over the years suggests to me they are hungry to get municipalities to borrow, so they can bump it back up again.

The Innisfil District Association website also noted:

When EPCOR’s offer was presented to council, the cost to the town for dipping into EPCOR’s deep pockets was more than some councillors could live with….
Also, there were terms included in the proposed agreement that could lead to a reduction of the town’s control over both water and wastewater and hydro assets.

IDA is a citizens’ group that acts as a watchdog on council activities for residents. Here in Collingwood, we have only ever had groups that acted to benefit one or more individuals – VOTE (aka Voters Opposed to Everything) and Better Together Collingwood (aka Brian for DM) for example – both simply there to boost some person’s or group’s climb into power (and in VOTE’s case, to cling to it once there).

So I ask: what’s in Collingwood’s deal with EPCOR that is not being told to the public? What hidden clauses are in the deal? What penalties? What are WE on the hook for?And why won’t The Block tell us?

Yes, yes, I know: The Block doesn’t tell the public ANYTHING because they are conniving, sneaky and deceptive. But don’t you agree we have the right to know what they are doing with our public utility? With our tax dollars? Don’t we have the right to an open, accountable municipal government? Well, we can get one next term once this lot is tossed out.

Collingwood deserves better.

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Ian Chadwick
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