County will hold decision on Wellington water pipes tender to gain legal advice on project guarantees

Following extensive discussion and public comment, council agreed Tuesday night to hold its decision on approving a tender contract for the Wellington watermain and sanitary sewer trunk infrastructure (pipes) until it gains legal advice in time for the Dec. 19 council meeting.

“A number of points were made this evening that I think deserve further examination,” said Mayor Steve Ferguson, deferring to Wellington councillor Corey Engelsdorfer for the motion to seek advice.

“We heard a lot of clear comments from the audience tonight about the pressures of providing infrastructure to support development that ultimately may or may not be built due to current economic conditions,” stated Engelsdorfer. “This will give us a chance to sit as a council and discuss and hear from staff what we may be able to do moving forward.”

Comment from former councillor Ernie Margetson was taken to heart by several councillors. In essence, he spoke to the benefit of a guarantee related to the up-front development charge payments.

Margetson acknowledges the municipality is obligated to move forward, “but it doesn’t preclude that we can get an agreement with a schedule for payments now… Let’s get agreements that we will see payments. Win-win…. structure the final phase with a structured deal… they will pay the money as soon as our work is done.”

Council agreed with public comment that it would also like to see a concise outline of the entire project and all its components and phases.

Council verified it would not lose the current contract tender bid as it is an irrevocable offer of 120 days bringing it into late January 2024.

Should all move forward for the pipes tender, council is also being asked to approve additional funds in the amount of $2,705,540 on long-term debt for the capital project. Approval of the tender winner from six bids will pay $16,104,835 to Clearway Construction Inc. This was the lowest bid, the highest coming in at $24,799,600.

The budget was approved before the Wellington area-specific development charge being adopted and was financed solely by debt at that time. As a result of the specific development charges, the debt for these projects can now be financed in part by development charges.

The staff report explains combining the total water and waste water budgets for the entire project creates a funding blend of 91 per cent funded by development charges ($14,657,653) and nine per cent funded by user rates ($1,447,182).

This phase of the project does not include the required sanitary pumping station which is in the design stage and in expected to be tendered in spring of 2024.

Staff reports state the project will increase water pressure and flow in Wellington (including the Wellington on the Lake community) and support the final connection to the new water tower.

Several members of the audience used the catch phrase “press pause” begging council members to further examine the costs, plans, growth numbers, development fee payment schedule, locations of development and clear communication, more often.

Before the vote, former Wellington councillor Mike Harper told council he trusted staff then, and continues to now, as the County moves to rebuild the 1960s/70s infrastructure.

Harper reminded that public discussion and planning has been ongoing since 2019. Though public comment stated communications have been few and far between, and highly confusing.

Harper explained the municipality is not in compliance with the province’s requirement for three year excess capacity and not in compliance with the water and waste water environmental standards.

“Changes made to the Wellington Secondary Plan in 2015 also mean we have to provide capacity to owners and developers who bought residentailly-zoned lands in good faith.”

Noting provincial and legal intervention is the alternative, Harper further explained the municipality’s upfront financing agreement is having the desired effect despite two of four original large developers walking away.

“Kaitlin and Fields of Wellington were willing to accept our terms… understood that rural communities can’t afford upfront costs and confident in the PEC brand and its ability to attract its fair share of growth. It separates out serious players from tire kickers,” he added.

Two of three contractual obligations – the water tower and expansion tank on the water/wastewater plant – have been met, but the municipality has an outstanding obligation: tonight’s budget approval for trunk lines and the pumping station.

Current Wellington councillor Corey Engelsdorfer gained support from council to direct staff to prepare a background report on municipal best practices and frameworks for development charges pre-payment agreements.

His ask for a third party review of the January 2021 water financial plan and its recommendations for reporting under the regulations to council was eliminated due to high costs, and anywhere from six months to a year to execute.

Director of Finance Amanda Carter explained the ask would require several financial plans be updated, and several studies inter-connect with other studies so overall, the task could amount to hundreds of thousands of dollars as well as many months of staff time.

He had called for these noting feedback from the public at an August information meeting and a November audit committee meeting regarding concern to financial risks associated with the Wellington water and waste water infrastructure upgrades.

Carter added the 10 and 20-year forecast studies do include consumer price indexes, “but nobody could have predicted the impacts of COVID, which I think is what primarily influenced the Wellington area specific infrastructure.”

She warned that because all parts of the project are not at the design phase, the budget estimates are not finalized and she didn’t recommend “putting out number after number if they’re not accurate” and also did not recommend putting out premature information to the public.

Meanwhile for Picton, council did approved the low tender bid of $4,587,650 to BGL Contractors Corp for the Picton Main Street sanitary pump station. That amount was within the allocated capital budget for the project first identified and approved in 2015.

The staff report reminds the Picton station is at end of life with limited capacity and many components that would need repair or replacement have been discontinued.