Quicksand

The ground keeps shifting. The rules keep changing. The assumptions crumble under the lightest scrutiny. The explanations are incoherent. The only thing that doesn’t change is that existing waterworks customers in Prince Edward County are on the hook for a rapidly rising bill they cannot possibly pay.

Yet, Shire Hall and Council have decided a review isn’t needed after all. They feel no need to double-check assumptions underlying a $200 million investment. No need to question how a population that has been flat as a table for 130 years is suddenly going to double. No curiosity. Just full steam ahead.

For four years, Shire Hall has assured Prince Edward County residents that developers are champing at the bit to build thousands of new homes in Wellington and Picton. They know this, they say, because developers are prepared to pay fees upfront rather than when building permits are issued.

It was all Shire Hall needed to get this mega project ball rolling. It was all the evidence needed to push the button on the first half of the $200 million project.

To date, no developer has paid a cent in upfront charges. The Wellington developer’s deadline came and went a year ago. Shire Hall extended their deadline to September this year. Nothing yet. Not a penny.

But never mind what was said before; Shire Hall is pressing ahead with even bigger plans. Rather than settle for $100 million in Wellington, it is moving full steam ahead on a super water plant and pipeline to Picton, pushing the cost to $200 million.

Don’t worry about the fantasy Shire Hall told you four years ago. Forget that it finally acknowledged the risk exposure to existing waterworks users—it has a new story to tell. Come this fall, Shire Hall is going to come up with a fresh, new, combined Wellington/Picton story.

Perhaps the most shocking admission from last week’s committee meeting was when the audit committee chair said he didn’t know how the numbers work.

However, John Hirsch assured his council colleagues that the audit committee would— four years after the fact—get to the bottom of the assumptions forming the foundation of the massive infrastructure spending.

“Our job will be to focus on the uncertainties— cost estimates and growth estimates,” Hirsch promised his council colleagues. “We need to get Watson’s to lift the veil on their proprietary modelling methods—to figure out where their numbers come from.”

Well, fantastic. Four years after the fact, the South Marysburgh councillor will, at last, ask questions about the growth projections. The audit committee chair is now curious to know how Wellington will grow from 2,000 people to 14,000. He says he is now interested in understanding how Picton grows from 5,800 to more than 32,000. The councillor will, at last, focus on uncertainties and “their numbers.”

It is shocking that this councillor and his colleagues don’t know this already. That they didn’t know it last term when Council agreed to spend $100 million in Wellington. It is depressing as hell to know that Council is relying entirely on faith. Particularly as it seems the projections are using bad inputs, whacky estimates, marketing hyperbole and spitting out fantasy. Garbage in, garbage out.

No one until now thought to ask the consultant if any of it makes any sense. Or how it got its numbers? Or does the scale of this project seem plausible? The audit committee chair says he will ask these questions now. Four years—and $50 million later—seems late to ask such questions.

But it is just another example of a shifting and treacherous landscape.

According to the consultants, there were 6,925 waterworks connections in Prince Edward County in 2020. However, in 2008, the County reported just 3,754 water connections. The consultant’s customer count implies, therefore, that the number of County households had doubled in 12 years. But it hadn’t.

Just 1,353 new building permits were issued between 2008 and 2020, according to the County’s building department data. That leaves 1,818 households unaccounted for. A quarter of the consultant’s count of waterworks connections doesn’t match with Shire Hall numbers.

The truth is that Shire Hall numbers cannot be relied upon. They crumble under scrutiny. And then the story changes. Yet, Council relies on an ever-shifting story to make the biggest decisions this County has ever made.

Here is why it matters.

If thousands of homes aren’t built soon, each existing household with municipal water will fund this $200 million debt—about $30,000 per household (with water service). This is fact. Hard earth, unimpeachable fact.

The cost of carrying a $200 million debt (that is, interest and principal payments) works out to about $12 million per year. Waterworks currently spends about $6 million. Total. Waterworks operating costs— absent developers stepping up with truckloads of cash—may triple. Your water bill along with it.

That is the scale of the risk being lowered onto your home. Can you manage it?

rick@wellingtontimes.ca