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Unimaginable

Posted: January 21, 2021 at 12:52 pm   /   by   /   comments (12)

Report tosses around large numbers for Wellington’s future

An area-specific Development Charges Study for Wellington was the subject of a public meeting held last Thursday. Andrew Grunda, an economist from Watson and Associates, presented a plan to council regarding setting an area-specific development charge to Wellington, that would encompass all future growth. Currently, the County recovers the growth-related capital costs for water and wastewater services through a connection charge imposed County-wide under the authority of the Municipal Act. The plan would see a premium charged to Wellington, to help offset the $96.5 million in gross capital costs associated with a new water and wastewater plant, as well as upgraded services throughout the village.

For several months now, engineering consultants have been busy imagining Wellington in the future. A future in which the village population is four times larger than it is today. And it is expensive. The price tag is currently set at $96.5 million—even before a shovel is in the ground. Wellington has bounced between 1,500 and 2,000 residents for over 100 years. The current pressure on the population is downward. Yet the County is making plans for a future that will welcome 8,600 residents.

To make matters worse, of the $96.5 million, only an estimated $75.6 million is recoverable through a development charge. Residential development charges will make up $46.4 million, or 48 per cent of the capital costs and non-residential is expected to make up $29.2 million, or 30 per cent. This leaves $20.9 million, or 22 per cent to be left to the taxpayer. Watson classifies this as a benefit to existing users, meaning existing residents will see better water pressure and more efficient waste takeaway. There is also $2.3 million included in that number that is classified as a post-period benefit, meaning the planning for even more future growth or services. “If you are replacing infrastructure with new infrastructure, then that replacement is a benefit to existing,” said Grunda. “If you didn’t expand it, you would ultimately have to replace those treatments plants in the future. This acknowledges that you are accelerating that replacement by constructing it through these works. The elevated tank would be replacing existing storage demands and addressing water pressure issues. The sanitary trunk sewer also improves current levels of service in addressing waste water conditions.”

Through the 2017 Water and Wastewater Ad Hoc Committee and 2018 Development Charges Background Study process, it has been the County’s intention that water and wastewater services would be incorporated into one development charge in the update. The County’s current connection and development charges for a single detached home— roughly $18,000—are already higher than all of its neighbours including Belleville, Quinte West and Brighton. The new charges would see the fee jump to nearly $30,000 per residential unit—a 60 per cent increase. Non-residential development charges would see an increase from $5.53 per square foot, to $34.14 per square foot. Grunda explained that though these charges might seem high, they are necessary to move forward. “It’s important to note that while the positioning is higher, this is the required charge to fund that share of capital that was identified. If these charges were to be exempt or reduced, then that would be funding that would have to come from some other source, principally water and wastewater rates,” he said.

At the current rates, Wellington doesn’t attract much non-residential development. It is hard to imagine that will change with a 517 per cent increase in fees. Councillor Mike Harper asked what would happen if Wellington can’t attract this type of development. “If those lands were to be maintained as non-residential, and the development was delayed, then cash flowing the costs that you are placing that would later be paid for by the development when it occurred would have to be a consideration,” said Grunda. Ultimately, the shortfall would fall onto the backs of current County taxpayers and water users.

One other item of note is the effect on being able to offer affordable housing in the village. The current fees already make it difficult for a developer to offer low cost housing. The Watson study does explain that a 30 per cent reduction is offered for any affordable housing project, but that is after the rates are already increased by 60 per cent, meaning developers will still be paying 30 per cent more to offer affordable housing in the village.

Councillor Kate MacNaughton asked how the impacts will be communicated to ratepayers. “It looks like we are taking on an enormous amount of risk and I really don’t know if there are enough ways to offset this risk that would give me confidence,” she said. “I’m not even clear if the full plan for servicing Wellington necessarily meets my vision of Wellington’s future longterm.”

CAO Marcia Wallace explained that her team is currently in talks with developers on up-front financing agreements to get the majority of the development financed through something alternative so the municipality isn’t carrying the full weight. “We are in the process of having conversations around an up-front financing agreement for the four largest developments. What we are hoping for is we have a draft agreement before we come to council on February 25 so we have a better idea of how this might impact, and then the ratepayer piece will also get more flushed out as we look to the next rate study which is something we are doing this year as our existing rates expire at the end of 2021. We see that there is risk now with an Official Plan and a Secondary Plan that permits growth that we cannot service under the current situation. We cannot approve any more development even though our Secondary Plan says it’s allowed. Eventually we will be having a legal risk, not just a financial one, for not meeting our obligations to match up with our own planning framework,” said Wallace.

Councillor Bill Roberts asked about the governance of water and wastewater in the village. Roberts believes the County should look at setting up a commission of water users who have a direct interest. It should be noted that only three current councillors live in an urban centre and pay water and wastewater rates. “This is a public meeting with no public present or interacting with us. And I don’t think it’s just about ZOOM. Pre-pandemic, these meetings were pretty perfunctory and more formal than productive. I’m still concerned that we haven’t had a very good discussion on the appropriate governance related to Wellington development charges as they relate to water and wastewater. Wellington water consumers are largely left out of the management of their own water utility, and they pay the entire bill. To pretend that this is some sort of meaningful public exercise is fraught with a lot of doubt,” said Roberts.

Councillor Harper circled back to the growth forecast, that many are having trouble grasping. “If you look at that, what you know about Wellington, and what is going on. And you look at the secondary plan and what the growth forecasts are, what’s your feeling about this sort of growth forecast. A lot of the public in Wellington are shocked that we would spend $100 million with the expectation there would be 8,600 people here one day,” said Harper. Grunda noted that this isn’t a unique situation. “From our experience this isn’t uncommon. A lot of municipalities find themselves in similar situations where they need to provide servicing. Obviously water and wastewater servicing is very expensive, especially on small systems. What we generally see is municipalities going through this process of understanding what is the anticipated development. Looking at land supply as well as market demands that could be achieved. And then try and look at the underlying servicing and whether or not that can be phased to address those financial concerns.”

Councillor Jamie Forrester didn’t mince words when it was his turn at the mic. “I know we probably have a legal obligation to do this, but what happens if we don’t do it? And what happens if we don’t get the growth we are expecting over the next 20 years?” CAO Wallace explained that developers are keen to get their building underway. “There is a lot of interest and belief on the part of the developers. They feel that the market is there over the next five to ten years. There always is risk when you build infrastructure as to whether the development is realized.”

Councillor Andreas Bolik added that he shares some concerns raised by residents surrounding the lack of industry employment, combined with Wellington’s smaller population, lack of younger workers and the difficulties of maintaining infrastructure. “We don’t have industry or commercial and I don’t see it happening in Wellington or even Picton for the matter. Our population has hovered around 25,000 for the last 20 years. We’re not growing, but we’re changing,” he said. “The definition of insanity is doing the same thing and expecting different results. We have a problem with maintaining the infrastructure we have now. Now we are looking at doing further development and spending 100 million on new infrastructure instead of spending it on fixing what we already have.”

The development charges bylaw is to come before council on February 25 for consideration. The development charges background study documentation and a video of the meeting can be found at the County’s website.

Comments (12)

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  • January 26, 2021 at 10:48 pm Mark

    Tonight Council had zero (0) questions for the consultant presenting water costs at Council. Biggest issue in the County and our Council has not even “one ”
    question! That says a lot about where we are headed. How could you not question affordability? Hmmmm !

    Reply
  • January 25, 2021 at 6:26 pm Al Brosseau

    This is ridiculous!!!
    If you’re planning for 8,600 more residents charge these infrastructure costs to these incoming residents through fees, welcome taxes etc.
    The city counsel should remember that they’re working for the so called “2,000 or so residents” not those projected 8,600.
    Al Brosseau
    60 Heritage Dr.
    Wrinkle City

    Reply
  • January 23, 2021 at 11:31 pm Chuck

    One more extreme example of an out of touch governance. Other than a Giant Tiger all locals have to travel to Belleville for affordable clothing as our Botiques are out of reach. NO to a $100,000,000 debt risk. What about helping locals struggling.

    Reply
  • January 23, 2021 at 11:15 pm Susan

    I believe this municipality is way in over it’s head. We are over regulated, over taxed, over populated by tourists . Most taxpaying residents would agree. Stop the influx, stop the playground growth so original County residents can just enjoy a normal affordable life.

    Reply
  • January 23, 2021 at 8:03 pm Fred

    I do not hear of any other small community facing 100 million dollar water infrastructure needs. What gives here? Something has to change be it regulations, water science, or our expectations, or put everyone back on wells and septic even in urban. This is just f*****g insane!

    Reply
  • January 23, 2021 at 9:52 am Nancy Arthur

    In my opinion, counsillor Bolik makes complete sense and is most accurate!
    We didn’t come here to live in a city or in a town that has been overrun with airB&Bs . We have watched the whole dynamic of Wellington etc change as businesses fail and locals leave because of increasing costs and no full time resident base to support it.
    A municipality cannot survive on part time income ! There isn’t any housing left for for people to live in, even if they do get work and now, where are they going to work.
    Meanwhile, with the tourist influx and the rising Senior influx as well, that has sent property prices through the roof and the fact that we already pay much more than other areas for water and waste management, you now want to tell us this reduced full time resident must pay more increased cost for your far fetched dreams? NO,NO,NO!!!
    Fix what we have and help your current full time residents or you won’t need to worry about the future because your base won’t be here in increasing numbers to pay for it.

    Reply
    • January 27, 2021 at 2:59 pm RLI

      I’m already thinking about packing my bags and leaving. I absolutely love this area, that’s why I moved here but with these grandiose ideas and the resultant increase in taxes I don’t think I’ll be here much longer. I am like many of the current residents a retiree on a fixed income and there’s not much room in my income to carry foolish debt loaded on because of ill considered plans of unthinking members of council. My advice, whether wanted or not, is for council to take a deep breath and consider what the people want and need. Pie in the sky ideals are not needed, by the way there is a big difference btwn want and need you may want to consider that.

      Reply
  • January 23, 2021 at 5:31 am Peter N Hughes

    Prince Edward County to me is a tourist attraction- farming and retirement place to live and for me and many more like me will likely come back to where we grew up to enjoy the remainder of our life like so many other before us last summer when we were down there riding through Wellington the people that was there was so pack you couldn’t find a parking space So you should be happy to have a community that can that much money into the county

    Reply
  • January 22, 2021 at 7:09 pm Michelle

    Picton is still drowning in unsustainable water bills from the $30,000,000 Finnegan Waste Plant fiasco. Do we ever learn from past mistakes?

    Reply
  • January 22, 2021 at 6:47 pm Robert J.Young

    Your estimate to upgrade the infrastructure is good for how long and what recourse do taxpayers have when the “” actual cost ” exceeds your estimates ? Did the general population of Wellington approve your grand plans to devastate the small community with this size of development, which is unheard of . How much of an inconvenience will this create while it’s being constructed and the cost to residents in taxes and other major obstacles ? Are the County Politicians that desperate to grow the County because they’re being sold a Bill of Goods by potential developers looking to get rich ? I would think if the elected officials polled the local residents about the total impact of this mindless venture, your answers would be in stark contrast to what your planning to dump on the Wellington residents !

    Reply
  • January 22, 2021 at 12:08 pm Rick

    I only have this to say, with no full time employment in the county it seems silly to be spending that amount of money for something that will likely not be seen. People are moving out of the county already because there are no full time jobs available… seasonal jobs just does not cut it. Work on getting full time employers here before spending money on something that is NOT needed now ir even the next 5 to 10 years. Bills are already high and real estate prices are through the roof here. Think before going down a path that will end up driving people from the County even faster than they are leaving now.

    Reply
  • January 22, 2021 at 10:20 am SM

    Assuming for the moment that this nearly 100 million dollar project were to be approved, the County will have to come up with the money up front. Development Charges, and other building charges are not realized until a building permit is issued. Developers build their projects in phases to control cash flow and minimize risk. The County won’t be able to build in phases. As it stands now, Wellington Bay Estates appears to be ready to proceed and so does the Fields of Wellington. W.B.E. might be able to start by connecting to the existing services, but F.o.W. needs the new infrastructure. Who knows if the Kaitlin Group will ever start their project. It has been sitting idle for years. In any event, the County will be required to take on this huge debt and maybe in the best case scenario, in 10 or 20 years the development charges will have been collected. In the meantime, the County will be carrying these costs plus interest on the borrowed money and will be obligated to repay it regardless of whether these developers follow through to build out.

    Reply