Back to basics

Water rates committee stuck at the starting line

Twenty-four months into their mandate, members of a Shire Hall committee are still trying to figure out what they are supposed to be doing—still unsure of their role?

The County’s Water and Wastewater Rates Committee—a mix of resident and council members—was formed in 2023. The idea was that this group would help to determine water rates in the County from 2027 to 2031.

But despite a series of meetings over the past two years, the information flow remains distinctly oneway— mostly a consultant explaining process to committee members. With time running out, some members worry that they will be left to justify decisions they had no part in making. Frustration is beginning to seep into their questions.

“Are these sessions intended to be working sessions or merely informational?” asked Ray Ford, resident of Prince Edward County and former municipal staffer, at a committee meeting last week at Shire Hall.

Members likely believed they would have tangible options and recommendations on the table before now, to discuss and debate. But instead, they heard another presentation on the various ingredients that go into the rate-setting cake. Lots of how, very little what. Or why?

None of the ingredients (inputs in waterworks rate modelling lingo) has yet been nailed down. Much work remains to be done.

In fairness, none of it is the fault of the consultants or existing Shire Hall staff. Indeed, the folks who set this process in motion are all gone. The key Shire Hall staff in admin, finance and engineering are all new.

The fantastical infrastructure plans laid out in 2021 are now generally recognized as wildly oversized and unaffordable for the waterworks utility serving a customer base of just 6,000—folks, already burdened by among the highest bills in the province.

Moreover, the current project—water and wastewater trunklines in Wellington is months behind schedule and likely to cost much more than was budgeted.

It has taken time to rework plans to fit a more sober outlook.

Layered over all of it is a vastly different economic outlook than existed five years ago.

Councillor Janice Maynard wanted to be assured that current infrastructure planning reflected more realistic expectations of growth.

The consultant reverted back to process.

When it comes to the economic climate, do we want to be more conservative about development in the near term? And if so, what are the implications for the infrastructure?” posed Sean-Michael Stephen, a principal with Watson and Associates, a consultancy.

For some, it felt like waterworks infrastructure 101. For folks who figured they would be further along the road by now, it was an unsatisfactory answer.

Later, the consultant explained, in the same selfevident manner, that even in the event the growth pays for growth (of infrastructure), there will be a time lag—of years and perhaps decades. A time frame in which water ratepayers will fund infrastructure expenses on behalf of developers.

“Just because you’re maybe undertaking expansionary projects to serve development doesn’t mean you’ll have the funds from development charges when that project is completed,” said Sean-Michael Stephen.

Lacking anything tangible to hold on to, committee members asked how affordability was being factored into the calculations.

“Is affordability a criteria?” asked Bob Cooke, a resident member.

Consultant Stephen explained that unless the County was prepared to extend the cost of infrastructure upkeep and expansion to property taxpayers— which it isn’t—there isn’t much to be done.

“The costs are what they are,” said Sean-Michael Stephen. He added that the only real option available was spreading rate increases over a longer time period.

Cooke asked about affordability ratios, including comparing the cost of the water system to disposable household income.

“Have those been applied?” asked Cooke.

The consultant said such metrics might be used to compare one community to another, but aren’t generally relevant in a rate-setting exercise.

“You have these systems in place—they need to be operated, you have to maintain them for your rates or businesses. So while the cost may be greater than what some other municipalities charge, that doesn’t mean that rates can be lower.”

Sean-Michael Stephen acknowledged, however, that such ratios are useful when considering future infrastructure expansion. His comment might have seemed confusing to some members, since the key driver of capital costs for the past five years has been ‘future’ needs.

It brought the discussion full circle.

Earlier in the session, Stephen said that at another meeting—likely in March of next year—he would bring back the working assumptions for anticipated growth, demand, and capital requirements. These inputs would then be processed into rate scenarios.

Maybe next spring the committee will have assumptions and recommendations that they can sink their teeth into. But by then, it will have just a few months before rates will have to be cast in stone for the 2026 rate year. And an election will be on the horizon.