Big numbers, big decisions to serve current and future residents of Wellington

Wellington – Google maps satellite image

By Sharon Harrison
The municipality is tackling how to solve current and future problems with development in Wellington, at enormous cost.

A lot of big numbers were bandied about at Thursday’s virtual Committee of the Whole meeting as council heard a report on a Wellington-specific development charges background study.

The crux is an Official Plan and a Secondary Plan that permit growth that cannot currently be serviced by water and sewer. That, says the municipality’s Chief Administrative Officer is the reason for the study, to help address that gap.

“We see that there is risk now with an Official Plan and a Secondary Plan that permits growth that we cannot service under the current situation, so we cannot approve any more development even though our Secondary Plan says it’s allowed,” said Marcia Wallace. “Eventually, we will be having a legal risk not just a financial one for not meeting our obligations to match up with our own planning framework,” added Wallace.

The challenge is looking at anticipated capital needs of $96.5 million – about $75.6 million would be recoverable in development charges eligible costs and County ratepayers would be on the hook for $20 million.

“I know a lot of the public in Wellington are shocked that we would spend close to $100 million with the expectation that there would be 8,600 people here someday,” said Wellington councillor Mike Harper.

Andrew Grunda, Watson and Associates

The municipality retained Watson & Associates Economists Ltd. in September 2020 to prepare the study. Representative Andrew Grunda gave an overview, and brief presentation, of the study findings.

Grunda explained the municipality currently imposes charges for water and wastewater services through a connection charges bylaw on a County-wide basis.

The intent of using an area-specific development charge (DC) bylaw for this purpose is to address and facilitate the servicing requirements for the Wellington community for water and waste water.

“And to do so through this mechanism as a funding tool for a potential up-front funding arrangement,” said Grunda. “It also reflects council’s intent that occurred through the 2017 water and wastewater ad-hoc committee, as well as the 2018 DC background study that has been prepared for the County which sought to incorporate water and wastewater in the development charges realm.”

He noted anticipated development for the Wellington urban serviced area, as determined by the County’s master servicing plan, identifies growth over the full development would facilitate approximately 2,500 additional single detached equivalent units – adding about 6,400 people – about triple the existing population.

Grunda said non-residential development would be facilitated through the construction of industrial, commercial and institutional needs on approximately 28 net hectares of developable land. It is expected that approximately 927,000 square feet of gross floor building area of non-residential development would be required.

The master servicing plan also identified the water and wastewater needs to facilitate such growth.

“With the preferred infrastructure solution of that plan, it is identified that approximately $96.5 million in water and wastewater capital needs would be required.”

About a third of the $96.5 million would be required for the waste water system, with about two-thirds for the water system.

“Combined water and wastewater treatment plants account for about 67 per cent of the total cost, or just under $65 million,” said Grunda. “The remaining third of those costs would be the infrastructure for the purposes of distribution and collections, and the associated studies.”

About $46 million (48 per cent) would be attributable to residential development, with non-residential representing about 30 per cent ($30 million).

About 19 per cent ($19 million) would benefit existing development for the replacement of the current demands for the water and wastewater treatment plant – that would be facilitated by the new plants as well as addressing current level of service issues and storage and water pressure demands.

The water treatment plant is identified to be built in two phases, the first representing about $23 million, expected to be built between 2021-2024 and that the second phase would be much later, close to 2042.

Grunda said some of the infrastructure would be required immediately, or in the near term.

Wellington councillor Harper clarified what residents may have to contribute to the expansion and what the future may look like. He confirmed of the $96 million, the County is on the hook for about $20 million.

“If we were not to use all 28 hectares for non-residential, if for some reason we were not able to attract that kind of business, that still has to be covered: the shortfall there would have to be made up somehow,” he said.

Picton councillor Kate MacNaughton was interested in the impacts to ratepayers and the importance of communicating with the public.

“Looks like we are taking on an enormous amount of risk and I really don’t know if there are enough ways to offset this risk that would give me confidence,” she said. “I’m not even clear if the full plan for servicing Wellington necessarily meets my vision of Wellington’s future long-term.”

MacNaughton was concerned whether the County would be communicating directly with ratepayers through water bill mailings so they know about future meetings and are aware of the risks being considered which will be borne by them.

“As there is so much risk here that to one extent or another is going to be borne by ratepayers. They are already stretched.”

CAO Wallace said they are in the process of having conversations around an upfront financing agreement for the four largest developments.

“We are hoping to have a draft agreement before we come to council on the 25th, so we have a better idea of how this might impact.”

She noted the municipality is looking at every possibility to get the majority of the development to be financed through something alterative, “so the municipality isn’t carrying the full weight of the risk of ‘build it and hope they will come’.”

Sophiasburgh councillor Bill Roberts raised the issue of public involvement and risk and was concerned there hadn’t been a good discussion on the appropriate governance related to Wellington development charges as they relate to water and wastewater.

“Wellington water consumers are largely left out of the governance and management of their own water utility that they are using and they pay the entire bill,” Roberts said. “These are huge numbers with huge risk involved.”

“These numbers are staggering,” said Ameliasburgh councillor Janice Maynard, who asked about considering recalculating less than a full build out. “The risk is too high.”

Jamie Forester, councillor for Athol was concerned growth would slow down in the next two years once out of the pandemic.

“What happens if we don’t do it?” he asked. “What if we don’t get the growth over the next 20 years?”

Andreas Bolik, councillor for Ameliasburgh reminded “we have a problem in maintaining the infrastructure we have now. We need to re-examine where exactly growth should happen in the County.”

Grunda also addressed the proposed schedule of charges per residential dwelling unit type, and per square foot of gross floor area for non-residential building construction.

For a single detached dwelling of more than two bedrooms, the total new proposed charge would be $21,367 (current charge is $11,152); less than two bedrooms would be $15,000.

Apartments with a minimum of two-bedrooms would be $14,316, apartments with two bedrooms or less $9,875.

The non-residential charge would be $34.14 (current charge is $5.53) per square foot of gross floor area constructed.

Grunda noted an increase of roughly $10,000 per residential unit for single detached dwelling of two bedrooms or more.

“The reason for the more significant increase in non-residential is reflective of the underlying services demands inherent in the master servicing plan.”

Development charges would be payable at the time of building permit issuance which Grunda said was fairly customary.

The only exception being for rental housing or institutional development where development charges are paid over six installments over five years. Likewise, non-profit housing is to be paid over 21 installments over a 20-year period.

The development charges bylaw is to come before council on Feb. 25 for consideration/adoption. The development charges background study documentation and a video of the meeting can be found at the County’s website.