Heavy water

Waterworks committee digs into mammoth task

Three meetings in, and an ad hoc committee looking into the County’s waterworks—its costs spiralling and capital needs expanding— is still searching for structure as it wades through the vast number of issues, incompatible systems and the overall complexity of six water systems and two wastewater systems. More a collection of pumps and pipes than an integrated system, the County’s waterworks are unified only by common ownership, management and governance. And soaring water bills.

Sensing a longer, more cumbersome assignment than perhaps originally imagined, some members are already asking how long County officials expect the committee will sit. Meanwhile, Graham Shannon of Sandbank Homes is hoping to nudge his colleagues Sensing a longer, more cumbersome assignment than perhaps originally imagined, some members are already asking how long County officials expect the committee will sit. Meanwhile, Graham Shannon of Sandbank Homes is hoping to nudge his colleagues

Shannon sat on a similar committee in 2010. It met for several months that year before endorsing a capital expenditure plan and a new rate structure. Despite the hard work by the committee and Shire Hall staff, the plan failed miserably.

Shannon knows the risk of merely tweaking the models prepared by the County’s consulting economist, Andrew Grunda.

“What is the purpose of water rates?” asked the builder. “What is the purpose of connection charges?”

He believes this committee must take a thorough, ground-up approach in its examination of a waterworks business whose costs are about to hit a wall.

“There is limit to how much consumers can bear. I know the there is a limit on how much builders can pass along in connection charges. There is a limit, too, on how much we can borrow. So we need to fully understand the theory first.”

Others weren’t far behind. Andy Bowers ambled through a list of questions he hopes will be answered in the coming weeks and months, saving the big one for last.

“If water consumption continues to decline at the rate it has over the past decade, perhaps we need to question the size and urgency of the capital spending program,” urged Bowers.

Chief Administrative Officer James Hepburn agreed that the capital expenditure plan that underpinned the previous committee’s recommendations needed to be reexamined.

“There is a lot of merit in a review of the 20-year capital plan,” said Hepburn. “It’s a real key piece.

Hepburn added that the County has been debt-averse in general, but that this may not be the right approach to the waterworks business. He noted, too, that the 2010 committee recommended debt be repaid over 30 years but that council chose a more aggressive 20-year amortization schedule.

“It may have been too aggressive,” acknowledged Hepburn.

Hepburn also addressed the thorny issue of Belleville water rates. The County’s waterworks department purchases Belleville water to serve the County communities of Rossmore and Fenwood Gardens. The County pays more than three times the rate that the city charges its own residents for this water. For at least seven years, Mayors Robert Quaiff and Peter Mertens have attempted to cajole Belleville officials to negotiate a better, more neighbourly, rate. Hepburn reported to the committee last week that those efforts were going nowhere.

“I would say [Belleville officials] are skillfully dodging my calls,” said Hepburn.

In Ontario, municipal waterworks systems must be funded by the users of the system— residential homeowners, businesses, industrial users, bulk water suppliers and septage haulers. Even if they thought it was a good idea, municipalities aren’t permitted to pass along the costs of the system to the general taxpayer.

For the past two years, revenue from water rates has fallen well short of the cost of the system— forcing the County to dig into reserves to pay the bills. Those reserves are running low.

Consulting economist Andrew Grunda figures water and wastewater rates must rise another 50 per cent over the short-term and the cost for new homes to connect to the municipal waterworks system must rise by nearly 30 per cent immediately.

But Mayor Robert Quaiff knows this will be tough to do.

“The people of Prince Edward County are struggling,” said Quaiff.

Much of the discussion last week circled around the perplexing issue of falling water consumption. For as consumption drops—more of the cost of the system flows onto the base, or fixed, component of the water bill. It is why water bills keep rising even when no water is being consumed.

There were a variety of theories to explain the drop in water use, ranging from an increase in the number of folks spending the winter elsewhere, to an abundance of weekend and vacation homes in the County.

Mayor Quaiff noted the mostly likely cause was the rising costs of water, compelling consumers to use less. It was less clear what the committee had in mind once this answer was unearthed.

The committee meeting broke up still looking for a structure to their meeting schedule—what aspect of the business it will tackle first, second and third.

“There is likely going to be a lot of meetings,” said Mayor Quaiff.