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Tipping point
Do you buy this? Does this chart make sense to you? Take a closer look. The blue bars represent the number of new homes built each year in Prince Edward County since the amalgamated municipality was formed in 1998. There is little in this trend to suggest it is set to explode into an orgy of new homebuilding.
The orange bars represent Shire Hall’s forecast of new home starts predicted over the next nine years (in just municipally serviced areas only, those with water and sewer access). Suddenly, new home building in the County— stagnant for two decades— is forecast to spike next year. And keep on soaring. Then, inexplicably, new home starts will fall off a cliff by the end of this decade. Does this look plausible to you?
It is important. You have a lot riding on this forecast being accurate—especially if you are a customer of the County’s waterworks utility.
For it is upon this premise that your water bills are set to rise. Steeply. Later this week, a committee of council will hear from its consulting economist. Andrew Grunda will recommend that the average waterworks bill increase 41 per cent over the next nine years. Councils tend to do what Andrew says.
What does it mean? In my household, we paid $2,161 in water bills over the past twelve months. According to Andrew’s calculations, I should expect to pay $3,025 per year by the end of this decade. Prince Edward County already sports one of the most expensive waterworks in the province—this plan will cement that status. But this is undoubtedly the best-case scenario. It could get much, much worse.
Here’s how: Underpinning these calculations is an unprecedented growth in new homes, like nothing that has ever happened in the County. To bring water to all these new homes in Wellington alone will cost about $100 million, according to the County’s engineering consultants. A big chunk will be borne by the developers and passed along in the price of each new home. This sounds good.
But you and I will fund the debt servicing necessary to build the new pipes and plants until these homes are built. Not all of it. But then again, we have not been told how much the developers have committed to funding upfront. This is critical. For it is our only measure of their commitment and the confidence they have in their ability to sell hundreds of new homes. Council seems set to propose new waterworks rates before knowing this critical bit of information. Or perhaps council knows and isn’t saying.
Grunda also recommends that Shire Hall collect a larger cash transfer from existing customers to build the bigger, grander waterworks.
Taken together, this means that the annual cost of running the County’s waterworks will more than double from just under $9 million annually this year to more than $20 million by the end of this decade. The rates Andrew Grunda is prescribing depend, however, on the projections coming true. Thousands of new homes. Several thousand new families. Drinking municipal water. Flushing toilets. Kids splashing in fountains. It all sounds wonderful—if true.
If they don’t show up, however, things get dicey in a hurry. All those costs will pile up in any event. Expanding the waterworks machinery, once begun, will be hard to stop. The expense will have to be paid even if the estimates of new homebuyers fall flat. It will be you and me—existing waterworks customers—on the hook. If the forecast Shire Hall is banking on comes up short, your water bill increases will be much more than 41 per cent.
For some readers, this may be acceptable. But for a great many others, it represents a tipping point in a rapidly changing community. It is far too important to leave in council’s hands alone.
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