Penpals?

A recent letter to the editor has prompted a terse reply from Coldstream's Gyula Kiss, who sets the record straight!

The above letter was published in the Morning Star on February 21, 2016. The following is my response to that letter.

"Nice to see that someone appreciates my efforts of trying to make sense of the MWP! Unfortunately, I cannot take all the credit for the defeat of the referendum last November. The writer may remember that there were two members of GVAC who voted against both the MWP and taking it to referendum. The rest of the GVAC members supported the plan and sent it to public scrutiny. Staff and consultants put forward their best efforts to convince the public to vote “yes”.

During the election campaign something changed. Most of the candidates running for office declared that they no longer supported the referendum and they would vote against it. Why did these candidates change their minds? Did they receive additional information on the plan? If they could share this new information with the members of SAC it would make their work a lot easier." 

The only two sitting Directors on GVAC who remained supporters of the referendum were those who were acclaimed without having to campaign. Oddly, those are the only two Directors who are NOT customers of the GVWU and do not pay for the MWP.

You mention using cash-basis to cover the costs of the MWP budget. That is exactly what staff had been doing since the 2004 referendum. Ratepayers approved the borrowing of $35 M for the MWP yet we spent over $66 M by 2012. Where did the extra cash come from? It came from direct cash extraction from ratepayers. This was against the spirit of the referendum as this cash is not shared by future ratepayers. If staff needed $66 M they should have asked for a loan approval of $66 M not $35 M.

The DCWTP was not recommended by the Consultants of MWP 2002. In fact, they declared the current plan a waste of money. Which consultants were right? Judging from the results the 2002 consultants were right.

Adding a filtration plant to Duteau was not mentioned in the 2004 MWP Addendum. That was kept a secret for fear of rejection of such large referendum bill.

The cost of borrowing $35 M is about $2.4 M annually. This represents about 12% of the total budget of $19.6 M. Feet dragging is not the cause of the high bills: the cause is the high cost of operation and maintenance of the triple  water system. We now operate the Kalamalka Lake system, the old VID system with the domestic quality irrigation water and the new raw water irrigation system built by the ratepayers of GVWU. Those are the sources of the high water cost. Ad to this the cost of the two filtration plants in the plans along with their operation costs and you’ll see where we are heading with water rates.

One would hope these high water costs are shared equally by all customers. Not a chance! The majority of RDNO Directors just approved the rates for 2016. Domestic customers will continue to subsidize ICI customers for over $2.5 M for 2016. If subsidies are necessary than the entire community should contribute through a RDNO Function. As it is only domestic water customers participate in this subsidy. The two Directors who fought hard for this subsidy are not participating in the costs. Easy to tell others to pay if you do not have to do the paying yourself!

So these are just some of the facts. There are lot more but let’s leave those for another occasion.

Writing a letter to the editor is easy. Writing a factual letter is a whole lot more difficult.

Some of you may wonder how the $2.5 M subsidy above was arrived at. Here is a quick summary:

Budget requirement for 2016:     $19,600,000
Agriculture contribution:              $     783,799
Needed from domestic:              $18,712,520
Expected water sales:                   5,820,000 m3
Cost of 1 m3 of water:                  $3.22
Water consumption ICI                   1,580,000 m3
Expected revenue    @ $3.22      $  5,080,000
Subsidized revenue @ $1.58       $  2,496,400
Difference (subsidy)                 $  2,583,631

These are real, hard figures calculated from the data provided by staff. We can manipulated anyway we wish but the real facts are these. Anyone who gets his/her water for less than $3.22 per m3 is being subsidized. The base fee of $408/a in real term is the value of 126.71 m3 of water. In other words we pay for 126.71 m3 of water without getting a drop.

Only (residential) water customers are forced to subsidize ICI customers.

The annual repayment of borrowing costs us 898,470 cubic meters of water. Every item in the budget can be expressed in terms of unit cost of water ($3.22 per m3). Employees' wages: every $10,000 costs 3,106 m3. Thus, if we subsidize anyone we force the rest of the customers to pay more than their fair share of those costs.

Mr. Kiss is absolutely correct!  
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