By Joel Wittnebel/The Oshawa Express
After some confusion, city staff have released the investment grade audit (IGA), which has served as the pseudo-business case for the $8.4-million-plus upgrade to the city’s street lighting system. However, while all the information is there, the report council received had some noted omissions.
During council’s meeting on June 27, the final gathering before summer recess, council approved the mutli-million-dollar project based on a staff recommendation contained in a public report on that meeting’s agenda.
However, Councillor Amy McQuaid-England made it known that council had not actually viewed the full IGA prepared by RealTerm Energy, despite being responsible for making the final decision on the matter. At first, it appeared that councillors may not even get a full copy themselves, as staff said it contained confidential information that may need to be redacted before councillors would be able to view it.
Councillor Doug Sanders also showed concern that he did not have a chance to read the full report, noting it was a “stumbling block” for him, before he voted in favour of the recommendation.
Councillor Nancy Diamond said in the meeting that it would not be necessary for council to read the document as all the “salient features” were contained in staff’s final document.
In the weeks following the meeting, The Oshawa Express attempted to obtain a copy of the document, and were initially told that it was going to remain sealed.
“It’s mostly third-party, proprietary information that (RealTerm Energy) don’t want to be out in the public,” said Stephanie Sinnott, the city’s treasurer.
When contacted, RealTerm Energy said, by contract, they were unable to provide the information, but suggested The Oshawa Express contact the city to request it.
Following that, upon a second request, city manager Jag Sharma said that, in fact, the document could be shared.
“I don’t think that there’s anything that keeps it confidential at this point,” he said, also taking the chance to clarify the confusion regarding the document’s release.
“I think it’s just a matter of logistics,” he said. “It was confidential, we had it sent to council, they had asked some questions and things of that sort, but at this point in time, my understanding, and I believe this to be true, there’s nothing that keeps that document confidential.”
Options not offered to council
For the most part, the 100-page report contains all of the information and statistical facts pertaining to Oshawa’s street lighting system, along with the funding and cost savings from moving ahead with the project to switch the city’s 10,372 street lights to light-emitting diode (LED) technology.
However, there are some options and potentially concerning information that never made it into the staff report presented to council.
One particular omission was the chance to have RealTerm Energy cover up to 100 per cent of the project costs and operate the city’s system for 10 years while sharing some of the cost-savings generated from the more efficient lights – an option known as its Energy Performance Contract (EPC). The opening letter of the IGA contains information about this option and RealTerm’s Design, Upgrade and Transfer option, yet no mention of either is made in the staff report presented to councillors.
Under the EPC, RealTerm would take most of the financial risk up front, but would bring in the majority of the cost savings (61.4 per cent) for the 10-year contract. In the funding method voted on by councillors. the city keeps all of the cost savings, but puts burden on taxpayer funds for the upfront costs.
Speaking to The Express, Ron Diskey, the city’s commissioner of community services, explained why these options were not provided to council.
“We looked at all the recommendations and picked the one that staff thought was the best one to take forward to council and it was based on the return on investment and the overall cost,” he says.
He would not clarify why staff’s recommendation in the final public report did not consider providing options for council, something that has been done in the past with staff reports.
“Based on what the analysis was, the option that we picked…has the best return on investment.”
By using a loan from the Region of Durham, the city will start making annual payments of $1.04 million in 2017. However, the cost savings expected from the conversion to LED lights are expected to be nearly $1.5 million in energy and maintenance costs, leaving an extra $400,000.
“Staff have the responsibility of bringing forth the best option. This was the best option,” Diskey says.
For Mayor John Henry, he says he is convinced that staff brought forward the best choice and was not bothered that other options were not provided.
“I don’t have a challenge with it,” he says.
“It wasn’t concerning to me. Staff came back with a report that was sound.”
And while Henry notes there are some “short term challenges” with going further into debt, the positives outweigh the negatives in this case.
“The long term benefits, especially to the residents, financially and environmentally, make a lot of sense,” he says.
Potential other funding options were not the only thing left out of staff’s report, which also included the possibility of “step-touch hazards” with the city’s decorative downtown lighting.
The hazard exists when electrical equipment does not have sufficient grounding, causing nearby objects to become electrified.
According to the IGA, a “small amount” of poles in the downtown were installed without sufficient grounding, something that will be rectified when the lights are replaced during the conversion.
“From the best information we have, it would appear as if this is confined to a relatively small area downtown, likely performed by one electrician who did not complete the job sufficiently,” the IGA reads.
Diskey offered assurance that there is no danger to the public.
“There’s no public safety risk to this, these poles have been in place since the year 2000, we’ve never had one issue reported on them,” he says.
“The poles are grounded and will be regrounded or inspected and grounded to the current code.”
When asked about the fact that a potential public safety risk was ommitted from the council report, Henry says it is definitely a concern, but the issue will be rectified as the project moves ahead.
“It’s been dealt with and taken care of in a fast and responsible manner.”
An emailed request for comment to all members of council received no response prior to press deadline.
Reached by phone, Councillor McQuaid-England only noted that she was glad the document could now be released to the public, while Councillor Sanders said he did not want to comment on the document as he was unsure what aspects of it were public and if any details were to remain confidential.