Cost of guessing

Committee weighs the validity of growth forecasts against $300 million infrastructure expansion

What happens if Shire Hall spends $300 million getting ready for an unprecedented homebuilding boom—which doesn’t arrive? Or it happens over a longer timeframe than planned?

It is the issue burning most brightly at a committee tasked to set waterworks rates for 2027 and beyond.

Growth is supposed to pay for growth. That’s the idea, anyway. It is the mantra Shire Hall repeats to support massive infrastructure already underway and much more contemplated. But is it true? Much depends on the soundness of its growth forecasts.

The purpose of development charges (DCs) on new homes is to recover the costs of expanding waterworks, roads and such to accommodate an expanding community.

But what if growth doesn’t happen? Or is wildly exaggerated? Or if new homebuilding takes many decades longer than anticipated? The risk is that the municipality sinks hundreds of millions into the ground on infrastructure that may prove unnecessary or vastly oversized. If developers don’t build homes at a sufficient pace to fund this infrastructure, existing users must foot this bill through higher water rates.

“I have concerns about the scale of the plans [currently estimated at $300 million],” said Chris Ryerson, a public member of the Water & Wastewater Rates Community Committee. “It is very ambitious—especially on the backs of 6,000 ratepayers.”

Existing waterworks consumers in PEC— from Picton to Carrying Place, Wellington to Rossmore, and Ameliasburgh to Consecon— are underwriting this speculative investment. Existing users may fund hundreds of millions of expenditures until unprecedented new homebuilding arrives.

Concerns about bold growth forecasts are focusing the minds of committee members. Citizen members are not as confident as some council members that the growth projections promoted by Shire Hall will transpire—or at the rate projected. The citizen members peppered the County’s consultancy, Watson and Associates, with questions about the County growth forecast.

Sean-Michael Stephen of Watson agreed with the members’ concerns.

“Financial pressure mounts when growth doesn’t occur as expected,” confirmed Stephen. He added that such pressure can be mitigated by pre-payment agreements or developers building the infrastructure in lieu of future DCs payable.

“But as you plan for growth,” explained Sean-Michael Stephen, “it is critical to time infrastructure expansion well. You don’t want to build infrastructure ahead of time.”

But how does a community determine the correct timing when it hasn’t grown in 140 years?

Stephen said that is Shire Hall’s job. He explained that Watson’s modelling relies upon the business case produced by Shire Hall and Picton’s Master Servicing Plan produced by its engineering consultants. It is Shire Hall’s job to produce a timeline and a financing plan, explained Stephen.

The business case and financial plan will be presented later this spring, said interim finance director Arryn McNichol.

Councillor Phil St-Jean pressed the Watson consultant to agree that Ontario’s Ministry of Finance growth projections were accurate and could be relied upon.

Stephen said the numbers were generally accurate on province-wide basis, but added that there is more variability on the community level.

“Individual communities will vary by immigration patterns, employment patterns and local factors,” cautioned Stephen.

Part of Watson’s assignment is to look at the impact of waterworks DCs if applied only in Wellington, Bloomfield and Picton versus extending the same rules and charges to other water systems in Ameliasburgh, Carrying Place, Consecon, Rossmore and Fenwood Gardens.

Ameliasburgh councillor Janice Maynard didn’t like the sound of that. She said north County communities had already planned for growth; and that DCs weren’t needed there.

“We’ve carried our own,” said Maynard, injecting parochialism into the committee’s work. “We will continue to carry our own.”

Wellington on the Lake resident Dorothy Bothwell encouraged the committee to review the projections and forecast produced in Wellington’s 2020 Master Servicing Plan and to compare the performance over the past five years. According to the plan, an average of 69 new homes were to have been built in the village each year since 2020. Only 17 homes have been constructed since then.

“Watson’s should explain the gap,” suggested Bothwell.

On behalf of the Wellington Community Association (WCA), Joanna Green brought a list of 13 questions to the committee. Most queries sought to test the assumptions underpinning the County’s ambitious growth projections for new homebuilding. “Are they based merely on what developers tell Shire Hall, or is there more to it? If so, what is the evidence?”

The WCA also wants to know if a water pipe will be built from Wellington to Base31—how much will that developer pay for this expensive infrastructure? And when? Specifically?

CAO Marcia Wallace agreed to take the questions to her team and provide answers at a future date.