No independent review

Shire Hall looks to tender regional water plant this fall

There will be no independent, thirdparty review of the assumptions that support the largest infrastructure project this municipality has ever undertaken. There will be no second set of eyes checking the inputs and timelines underpinning $200 million of spending. No one will ask questions such as: Is the village really growing to 8,600 or 14,500 souls? Is a million square feet of commercial development really coming to the village? Are the existing plants really at the end of their life? And who will pay the hundreds of millions of dollars when these assumptions prove false—or decades premature?

Instead, Shire Hall is skipping past such awkward questions and moving directly to building a new super-sized regional water plant in Wellington. It intends to award a tender this fall.

It is a reversal of the commitment it made to residents and ratepayers in January.

When Council approved the contract to construct waterworks trunk lines at the beginning of the year, it did so against a wall of worry from residents and community groups.

They were supported by one of the leading legal municipal minds in the province. Andrew Biggart had reviewed the project financing and assumptions and was alarmed by the risks they represented to existing waterworks ratepayers across Prince Edward County.

“This is an irresponsible use of County funds,” warned Biggart, from Ritchie, Ketcheson, Hart and Biggart, in his presentation to council. “It is irresponsible to incur costs when you have no certainty of recovering the costs, and it is irresponsible to place this financial burden upon the existing ratepayers of the County.”

Taken together with a water tower and an overflow tank, the County—in January—was committing more than $44 million toward this mega project—with another $60+ million in the works. It had not received a dime of upfront development charges from any builder—despite agreements in place to do so. (It still has not.) The risks were/are potentially devastating for the 6,000 customers of this utility.

In January, Council agreed to take another look at its assumptions. Staff got its trunkline—residents would get a review. The County’s manager, Marcia Wallace, agreed, insisting that the review be independent and conducted by a third party if it was to be legitimate.

But that was then. Shire Hall says it asked for reviewers. No third-party firm was interested. None stepped up to review the assumptions. (Nothing in the staff report, prepared for Thursday’s council committee meeting, explains why 12 firms looked at the project documents and subsequently declined to bid.)

So instead Shire Hall will ask the audit committee to work with the County’s economic consultants, Watson and Company, to have another look at its own numbers. The report figures it will cost $70,000 for Watson to review its figures.

Watson is the same firm that produced every growth study and every development charges framework this municipality has undertaken since 2010. Watson is a strong and reputable firm. But it has no expertise to assess waterworks infrastructure capacity and condition. Nor is it fair, or reasonable, to ask it to review its own work. It cannot answer the core questions. Nor can it be impartial. CAO Wallace was correct in January— a review must be done by a third party if it is to be legitimate.

But Shire Hall isn’t waiting on the results of even a truncated, narrow review. It is pushing ahead to build the regional plant this year. It has applied for $18.3 million of funding from the province. It believes a regional waterworks strategy “ideally fits” the funding criteria.

The entire project (plants, pipes to Picton, and such) will cost $200 million (that works out to about $33,000 of additional risk for every household with a water bill in Prince Edward County.) Even, if successful, $18 million represents a pittance toward the scale of this expenditure.

Shire Hall knows it is facing distrust from the community and that it is making a big bet on the backs of existing ratepayers. The staff report suggests the audit committee, along with its consultants, will be able to calm residents’ concerns. The report repeats the oftsupposed notion that upfront development charges will cover debt charges for a few years. And that the possibility of $18 million from the province will buy it time.

And if growth doesn’t come? Or trickles in at the pace experienced in this community over the past 140 years? Then what? The report doesn’t have an answer to those questions.

The report goes before the Committee of the Whole meeting on Thursday. Staff are hoping it is ratified on May 7, so that work on the new super regional plant can get rolling.