Comment
Subs
A few months ago, council heard a presentation about risk management. The presenter outlined a set of guidelines to avoid costly insurance claims. All good information, except the person making the presentation, was employed by the County’s insurance underwriter. It was suggested to a couple of councillors, afterward, they may want to talk to other folks on the subject— perhaps folks without a vested interest in making sure the County never made a claim. So far, that hasn’t happened. The only information they have regarding what volunteers can and can’t do for their community comes from a single source—one with a stake in the outcome.
So, guided by this advice, the County will never sanction another trash bash. For, according to the municipality’s insurer, anyone picking up waste along the side of the road must be trained, must wear certified safety boots, a colourful vest and be guarded by a flag crew and sign vehicle cautioning drivers to avoid hitting the volunteers. A lot of resources to pick up a discarded coffee cup.
It is not that the insurance representative’s information was wrong or unhelpful; the problem is that council too often listens to a single authoritative voice and makes a decision based on that one viewpoint. In effect, they have sub-contracted decision-making.
Council appears ready to make the same mistake with its water rates. The last time Andrew Grunda, an economist and consultant, made a recommendation to council, he assured them that despite the fact that the development charges he was proposing were much higher than those of our neighbours, these communities would soon go through the same process and their charges would rise in line with the County. It didn’t happen. Councils in Quinte West and Belleville took a look at the recommendations, considered other factors— including the market’s ability to pay—and made the decision to move those charges up much more slowly than their consultant had recommended.
New home construction has flourished in those communities. It has floundered here. Three years later, council finally relented, discounting development and connection charges for homes built in areas serviced by municipal water and sewer. It has hardly helped. These charges—even discounted—are still higher than in neighbouring communities.
Grunda’s job is to create financial models that take a basket of variables and assumptions and produce a number at the end. It is an important exercise. And he does a good job of it. But models are only tools. They aren’t Ouija boards that predict the future. In fact, Grunda’s last go at water rates in the County missed the mark by a mile. His 2010 model failed to see water consumption continuing to decline and the pace at which costs would rise. It wasn’t a near miss— the model was $2.3 million off.
So as a predictive tool, it is a weak instrument. As a decision-making tool, however, it remains an important and vital exercise. But it is just that. Nothing more. It is not a substitute decisionmaker— that should be clear by now.
There are other—and I would argue more relevant— perspectives that must be weighed when setting water rates.
The chief being: What can the market bear? What will another 50 per cent increase in water bills do to those living on the margins now? To those living on a fixed income? How deeply can we dig into their ever-shrinking resources? Should waterworks bills force folks to leave their homes?
It is not as though consumers can control their water bill by using less. So much of the bill is made up of base costs that consuming little or no water has minimal effect on the amount households pay each month.
What about another steep increase in connection charges? These charges are already high compared to our neighbours. What effect will this have on new residential development for the next five years? How does that fit with the goal Mayor Robert Quaiff enunciated last week to a room full of skeptical builders, that he wants to see more homes constructed in the County—to kickstart an anaemic market for new homes to drive the County’s tax base? Will higher connection charges produce more revenue or less?
Pricing is more art than science. It is obvious that Tim Hortons would make more per donut if each were priced at $10. But, despite what their models suggest, common sense tells them they wouldn’t sell very many chocolate glazed at that price.
So why does this common sense elude our decision makers?
Council needs to begin by taking another look at the 20-year-plan. Grunda’s analysis assumes this is untouchable. So he begins with all the assumptions, capital plans and maintenance schedules baked into this plan.
I suggest that if Grunda’s numbers don’t work—and they don’t—the next step is to open up the 20-yearplan. See what can be deferred, what can be patched up and tended for another decade. Make some hard decisions about what would be good to have and what we can afford.
There are other considerations. Council needs to look at funding more of these future works with more debt financing. It must look at extending the term of its debt to 40 rather than 30 years. For six decades, the County mismanaged its waterworks—particularly so in Picton— it can’t all be remedied by one generation. It is wrong in principle and in practice.
This is a complicated business, and the implications for the lives of folks living on the edges of our community are profound. Council has a duty to get this right. To do so, it must listen to more than a single voice.
Council has been elected to make decisions on our behalf—not to subcontract that responsibility to a consultant. I expect Andrew Grunda would agree.
Comments (0)