Storylines

I read reports. For 20 years, I have read, considered, asked questions, and written about the reports, studies, and ‘preferred solutions’ emanating from Shire Hall. I have no particular expertise—neither engineering, legal, or planning. I have a few decades of finance experience—but more in the marketing of rather than administering or managing money. That’s it; I read reports.

So you will imagine my surprise when out of the blue—coinciding with the emergence of Wellington’s Master Servicing Plan in 2020—the storyline began to appear that Wellington’s water and wastewater plants were nearing the end of their useful life.

For decades I had read that Wellington’s water plant was a model of efficiency and function. In 2004, newly elected Mayor Leo Finnegan toured the Wellington plant and kindly asked your correspondent to join him. Clearly, the operators were proud of their facility—a big pipe collected water from a kilometre into the deepest, coldest and cleanest part of Lake Ontario. The plant featured a modular filtering system in which components could be swapped in and out as they wore out, or expanded to meet the needs of a growing community. The water plant—built in 1995— was described as ‘state of the art.’

Similarly, they explained the wastewater treatment plant regularly processed less than half its capacity. This allowed the operators to isolate one of the treatment trains to make repairs or optimize flows. They showed us their rigorous testing and reporting systems used to ensure the water was safe to drink and the effluent flowing into the lake was clean.

There was no sign then— nor any signal since—that this ‘state of the art’ facility was on its last legs. Until the Master Servicing Plan came along.

To be clear, there have long been concerns about the relative weakness of water pressure for residents’ use and firefighting purposes. Nevertheless, a 2018 Shire Hall report found “operating pressures in the municipal water system continue to conform to the legislated minimum operating pressure.” While the pressure was in the lower range of provincial standards, water pressure in 2018 was deemed sufficient for household use and fire fighting.

Through three ad hoc waterworks committees since 2010, it also became evident that running a water system along a kilometres long line in Wellington wasn’t/isn’t ideal. Maintaining a loop system is much easier to ensure the water remains clean and delivered with good pressure.

Yet, the system worked. Could we benefit from a bit more pressure? Would a loop system function better? Sure. But at what cost? What were the trade-offs? Shouldn’t Shire Hall have made this case to stakeholders and ratepayers? Shouldn’t users—the sole funders of the utility—be trusted to be part of the decision-making?

Here is the intriguing bit: The notion of sharing the $100 million cost of upgrading Wellington’s waterworks between developers and existing ratepayers seems to have first emerged in February 2020. A Shire Hall report under the unwieldy title Implementation Strategy for the findings outlined in the Wellington Master Servicing Plan estimated that about 76 per cent of the overall costs would be “fronted by development (growth).”

It stated that the expansion of these facilities would benefit existing residents “by virtue of capital and operation efficiencies that will be realized.” ‘Efficiencies’ but no mention of a failing waterworks system.

By April 2021, the consulting economist appears to have taken the cue and estimated that $18.6 million of the upgrade (18 per cent of water upgrades and 24 per cent of the cost of wastewater improvements) will benefit existing ratepayers.

Yet many questions linger: Where is the support for the notion that these plants needed this level of improvement for existing ratepayers? Shouldn’t there have been signals of the imminent decline or failure of these facilities over the years? Where are the studies documenting the assertion these assets are nearing the end of their run?

Of course, it is possible these assets are on their last legs—I am not qualified to say one way or another. But it would have been much better if a disinterested party drew these conclusions—say, an engineering firm without any skin in this game. A peer review to examine the condition of, and prognosis for these systems for existing residents, ought to have been the starting point of a foundation for this investment.

Put another way, if Shire Hall had determined these plants were at the end of their life, wouldn’t they have prepared the path with a confetti cannon of paper to substantiate the need for a $18.6 million upgrade? How do stakeholders test this conclusion in retrospect?

In any event, a peer review never happened. And likely won’t now.

And to be frank, it is, in practical terms, almost too late. Shire Hall has already invested $18 million into the project so far on waterworks-customers’ behalf. It is keen to spend at least $12 million more (likely much more) installing new trunk lines under the Millennium Trail to create a loop system. That is a total in excess of $30 million. So far, the developer has put up $4 million. Before he is permitted to build a home, he will have to put up perhaps about $6 million more.

Shire Hall says we needn’t worry ourselves—the developer is funding the debt Shire Hall has incurred on waterworks users’ behalf. Maybe. But servicing a $30 million debt requires about $1.5 million each year in payments. That gives us about five years of runway. What if the developer— the sole individual permitted to build a home in Wellington—doesn’t build anything for five years? (He has owned the land since 2006.) What if a few decades slip by, and the developer manages to build only a couple of hundred homes?

In this circumstance, servicing the remaining $20 million (of $30 million) debt falls squarely upon existing waterworks users across the County. That is if—and only if—Shire Hall doesn’t spend another penny on Wellington waterworks. Yet its ambitions are much grander.

Shouldn’t we talk about this?

rick@wellingtontimes.ca