County News
Crumbling foundation
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Consultant confirms massive hole in waterworks plan
The story started falling apart early last week. Shire Hall’s audit committee had been tasked with nailing down the assumptions that supported spending hundreds of millions on waterworks in Wellington and beyond. How many people are coming? When will they come? How much commercial development will they generate? And when?
Shire Hall wants to spend as much as $300 million on waterworks infrastructure, based on the belief that the population of Wellington is set to explode by four to seven times—and Picton is set to grow six times its current size. But where did these assumptions come from? What happens if they don’t pan out? And who will pay?
These questions have grown louder and more persistent over the past couple of years. That is until January, when Council agreed to hire a third-party consultant to take another look at the numbers. But by April senior leadership was reporting that there were no takers for the assignment— no firm was interested in doing the work.
Undaunted, Shire Hall decided it would continue to push ahead with the regional water plant and pipeline to Picton. It would do so without a third-party review. Instead, the municipality’s Audit Committee would ask a few questions, and that would be that. According to committee chair John Hirsch, the assignment had become more about assuring the “naysayers” rather than a rigorous inquiry.
But things went off the rails quickly last week when the committee met with their economics consultancy, Watson and Associates. Sean-Michael Stephen didn’t know the population growth assumptions that underpin the expansion plan in Wellington. Stephen, nevertheless, proceeded to blow massive holes into the County’s plan—letting daylight into the works for perhaps the first time in four years. He explained that existing ratepayers would pay the cost of these projects and interest on debt until development happened. In the case of commercial development, such growth may not occur at the scale proposed.
A COMMERCIAL HOLE
A third of the $100 million project costs were supposed to be paid by commercial development. But development charges— the source of this funding—in Wellington are ten times the rate in Picton and nearly four times the rate in Belleville. Indeed, they are much higher than other communities in the region. The councillor from Wellington, Corey Engelsdorfer, suggested it was unrealistic to expect one million square feet of commercial to be developed in this village—ever, but especially at the highest rates in the region.
That’s when the foundation gave way.
According to Stephen, these calculations were not based on expected market demand for commercial development. They were not based on a calculation of population or employment growth. The size of the commercial development and the $30 million in DCs to come from it were merely a function of the amount of land (28 hectares) accorded to Wellington in the Master Servicing Plan. The engineering consultants designing the plants had come up with this number—not the consultants whose job it is to predict such things.
The plan was based on lines drawn on a map of the village. (See story here.)
Folks on the committee struggled to understand what they were hearing.
“If I am gathering this correctly, this 927,000 square feet of non-residential is based on the fact that there are 28 hectares available, and we don’t have any idea if anybody is actually going to develop those 28 hectares?” asked Hirsch still processing the consultant’s words. “What happens if it doesn’t happen?”
Stephen said existing ratepayers would carry these costs until commercial development came along. But what if it never does?
“In the event you’ve got overbuilt infrastructure, and that you need to operate it and pay interest on the debt, then that is going to impact ratepayers,” explained Stephen.
According to Stephen, the only way to avoid this is to re-examine the size of the infrastructure, its timing and the hope that population growth vastly exceeds even 2021 assumptions to sop up the hole left by the overstatement of commercial development.
“If, for example, you believe that only a third of non-residential will be developed, that means that two-thirds of the infrastructure cost apportioned to that land just hangs out there with no funding source,” said Stephen.
Chair Hirsch wanted to know what that meant.
“How do we finance that? asked Hirsch.”
“That is going to be a rate-based impact,” said Stephen. Existing water customers will pay for it through higher bills until commercial development comes along.
To sum up, no analytical or predictive basis supports a third of the spending on Wellington’s waterworks expansion. Existing waterworks users across the County will have to fund the debt to finance this overstated development.
So what is there to do?
Stephen recommends a thorough re-examination.
“I understand there have been significant changes since the 2021 Master Servicing Plan that are likely going to significantly change these calculations, including the actual infrastructure,” said Stephen.
“If that is re-examined and it is determined that the infrastructure we have designed is no longer appropriate for the non-residential portion, either the infrastructure will be sized differently, or it’s getting supplanted by other potential developers.”
The message could not be clearer: The consultant has revealed a massive hole in the plan. Population growth predictions are outlandish.
The entire project must be re-examined in the clear light of day. Then, some hard questions have to be asked about how we got here.
Get cracking, Residents. A Municipal Recall Legislation should be demanded by everyone. Along with demanding the resignation of our Mayor and Councillor St-Jean. I am so angry with both of them. I’m done.
Mayor Steve Ferguson – 2018 Election
Michael Hymus – Developer – $500 donation – Rec’d Sept 19
David Cleave – Developer – $250 donation – Rec’d Oct 19
Melanie Hazell – Property Owner for Proposed IRTH Resort in North Marysburgh (which failed due to much opposition) – $500 donation – Rec’d Sept 24
Mayor Steve Ferguson – 2022 Election
Gregory Sorbara – Developer – $1,200 donation – Rec’d Sept 4
Michael Hymus – Developer – $1,200 donation – Rec’d Sept 23
David Cleave – Developer – $1,000 donation – Rec’d Sept 28
Alan Hirschfield – Developer – $1,200 donation – Rec’d Sept 23
Tim Neeb – Mahogany Management – Developer – $1200 donation – Rec’d Sept 27
Councillor Phil St-Jean – Picton, Ward 1 – 2022 Election
David Cleave – Developer – $1,000 donation – Rec’d Sept 27
Unelected Councillor Peter Morch – Picton, Ward 1 – 2022 Election
David Cleave – Developer – $1,000 donation – Rec’d Oct 6
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I have never seen a Council here so adamant in pursuing their agenda irregardless of the push back from residents. It leaves you with the feeling ” we know best “. It is very rare that a resident deputant at Council is ever asked a question.
The Audited Financial statements of Prince Edward county should be coming to the Audit Committee soon.
KPMG will present to the committee, and then at some point, per past practice, they will be posted on the County web site.
Should be interesting to see if the bloat trend continues. Or maybe the statements will just inexplicably be delayed. I guess we’ll just have to wait and see what were told, and how the news is spun.
And very interesting reading those ten deputations are. We waited six months after the 2022 Election to find out who was backing our Council in their Financial Contributions. Now we wait for the Audited Financial Statements for PEC. I still don’t like the way the “Syke’s” Financial advice was handled by this Council. It should have been the Mayor’s position to talk face-to-face. Not to be addressed Councillor Hirsch, nor the CAO. He deserved much better treatment.
There are 10 deputations tomorrow night in regards to a secret Picton Terminals deal. But not one in regards to the hugest impact the County has ever experienced, that being a 200 Miillion water expansion on the backs of water users. There needs to be a full stop pause and hear from the ratepayers.
There is a huge coverup of the incompetence of PEC municipal staff. Every staff member and every council member will be claiming it was not their job, they were not informed, they are sorry, and so-on, but it will be the taxpayers on the hook and any staff member even mentioned by name will claim long-term disabilities or sue for multi-million dollar payouts. Even today there is a contract for: Consulting Engineering Services for the Wellington Water Treatment Plant published. Time for the CAO and Mayor to fired for cause.
FYI – Taxpayers are NOT powerless. However, too many of us are sitting on the sidelines. Get off your backsides and write to Todd Smith, MPP and Paul Calandra, Minister of Municipal Affairs and Housing. Then write to the Ontario Premier. Then write to our MP. And just don’t stop. They work for us.
FYI – Shire Hall has a Conflict of Interest Registry 2024 on their website, and you can review the information provided to the public there.
Hi Karen.
Councillor Nieman’s son in law and daughter currently farm the land that Loyalist Heights is looking to develop.
Why did Councilor Nieman declare conflict with Loyalist Heights proposed development on Sandy Hook?
Our Mayor and one Councillor accepted over $1,000 in Campaign Donations from several well-known Developers working in this County during the 2022 Election. Look it up on Shire Hall’s website. It’s definitely well passed time the Residents of PEC demanded Municipal Recall Legislation from Todd Smith our MPP and from Paul Calandra the Minister of Municipal Affairs and Housing. I’ve already done this. But it’s going to take more than one damned voice in the wilderness to make this happen!
By the way – that’s $1,000 from one Developer to a Councillor and the Mayor. It was to the tune of $1,200 each from several Developers to our Mayor.
Your welcome.
It’s good that you requested this “Municipal Recall”. It is reasonable, given the track record of this Council and the Staff they blindly trust, driving full steam ahead with the agenda of outside property developers, even in the face of input and evidence from their constituents.
Sadly, Ontario has no such legislation. And the Ford government is hardly likely to do anything to offend property developers, or its other friends.
Public embarrassment for Council and Staff is the only tool taxpayers have left. However, recently, PEC Council has moved to suppress that, even.
But an over-arching problem is that the majority of PEC taxpayers simply don’t care enough to even cast a vote, let alone rise up and challenge Council and Staff.
It would be nice to see a change in this, but the probability of that seems minuscule.
Outside developers are driving this.
Supported by the CAO and County staff.
Unchallenged by Council.
Taxpayers are powerless.
I fail to see who or what is continually pushing this forward when we have great doubt in growth predictions, no immediate need and familys sufferinng to pay the current water/wastewater bills. Where is the supported logic in this venture? What is driving this forward?
This move of multi millions of dollars placed upon water & wastewater ratepayers by a Council and Administration that is not professionaly capable to advise or reasonably make such life changing decisions is not appropriate or democratic. A Public meeting is very necessary. Keep in mind this burden or gamble was never placed in front of the electorate in the past election.
Please consider this an Official Request to put forth a proposal to our government for the Right of the Electorate in Prince Edward County (specifically), and all of Ontario to use the “Municipal Recall Legislation”. This should not have to be a request. It should always have been available. To every Canadian, for that matter.
Send this to Todd Smith our MPP and Hon. Paul Calandra Minister of Municipal Affairs and Housing:
Todd.Smithco@pc.ola.org,
Paul.Calandra@pc.ola.org
This whole water works scenario scares me mightly. I do not believe we have the needed experience or knowledge on Administration or Council to appropriately deal with what they are undertaking. I agree with a Public Meeting to be called so that the residents that will ultimately pay for this venture have their say.
People need to get on the horn to their Councilors. This issue may very well be the most critical in decades. We cannot just leave this decision to a few inexperienced. The financial impact is staggering.
Should be a Public Meeting called to deal with this insanity. This Council is sending us into a potential financial peril! If this goes through the already highest water Bill’s in Canada will become a mortgage payment for every water user. Put the brakes on now!
Shire Hall needs a complete overhaul from the top and Mayor Ferguson needs to step down. This is an abomination and gross mismanagement of taxpayer’s dollars. The whole process clearly illustrates the bumbling, inept, pompous, self important arrogance at the top.
Council does not have the experience or knowledge to manage and make critical decisions on such a mammoth project. Further this was never put to the electorate at election time. Full Stop!