Water/wastewater path forward stalls with failed vote

By Sharon Harrison
A consultant’s strategy for the County saying it needs $255 million over the next 10 years to build new water treatment facilities and associated infrastructure was not accepted, and approval for staff to explore options also failed in a tie vote during Thursday’s committee of the whole meeting. The issue goes to the Sept. 8 council meeting.

Council was not being asked to approve any spending, or water rates increase, but only to approve staff to explore options more fully, including talking to developers.

During several hours of deliberations, debate and discussion council heard about Watson and Associates’ planned strategy for water and wastewater planning over the next decade. The strategy looks at how the infrastructure program can be funded over time through rates, development and connection charges, reserves, grants, developer contributions and debt.

It included the municipality borrowing more than $255 million over the next 10 years to build new water treatment facilities and associated infrastructure, and would have seen a combined water/wastewater rate increase of approximately 7.6 per cent for ratepayers, every year for the next 10 years. Across water and wastewater, the capital funding plan requires the issuance of $255.5 million in new debt ($180.5 million non-growth-related and $75.0 million growth-related).

“For a typical residential customer, Watson estimates that the combined annual water and wastewater bill would increase from approximately $1,867 in 2026 to $2,724 in 2036, an increase of approximately $857 per year over the ten-year period,” said Arryn McNichol, director of finance and information technology, adding that whatever scenario is chosen, there will be an increase in rates.

All seven recommendations were voted down as councillors rejected the comprehensive report to exploring its proposed solutions to deal with the water/wastewater infrastructure planning, not even voting to accept receiving the report, let alone endorse it.

The committee of the whole recorded vote lost in 6-6 tie, with councillors Brad Nieman, Corey Engelsdorfer, Chris Braney, Phil Prinzen, Roy Pennell and Janice Maynard voting against. Councillors Sam Branderhorst and David Harrison were absent. Voting in approval were Mayor Steve Ferguson and councillors John Hirsch, Phil St-Jean, Kate MacNaughton, Sam Grosso and Bill Roberts.

“It’s a financial plan, it’s not a commitment to spending any money at this point, it’s about getting the information,” reminded councillor Phil St-Jean. “It’s identifying the needs, a potential way forward. If we don’t pass these motions, we are not going to have a conversation with the developers.”

“What you’re asking for is fair and entirely appropriate to do the research and the due diligence before any plan is actually finalized,” said mayor Steve Ferguson.

Councillor Chris Braney indicated how there is nothing that is going to compel him to approve this at this time as it doesn’t make any sense to endorse it.

“It makes me extremely uncomfortable. This is not the time for us to even endorse or make anything close to an investment on this,” expressed Braney. “We need to focus on what’s ahead of us… we are in a very a perilous scenario that we need to be very careful. I don’t see there is any rush to endorse this and I think we can wait.”

Staff had recommended council endorse the “scenario 2B” option and its associated water and wastewater financial strategy as the basis for long-term financial planning and public engagement, as recommended by Watsons based on a one per cent annual growth forecast for infrastructure planning (revised from Watsons earlier 2.4 per cent figure).

It was noted there are just over 5,200 ratepayers paying for the systems.

The one per cent growth scenario represents a projection approximately 150 new residential units annually and a projected increase of approximately 9,330 residents over the 25-year planning horizon,” states McNichol’s report.

“I am not supporting this anyways,” said Nieman, “at the numbers I am seeing, I still don’t believe we are having that kind of growth, that’s just not going to happen at 150 homes a year.”

“Under this approach, the County would proceed with a regional water treatment plant in Wellington to ultimately supply both Wellington and Picton and Bloomfield with the infrastructure constructed and expanded in phases as growth occurs,” explained Cristal Laanstra, director of development services.

She said the existing Picton water treatment plant would remain in service only until the regional system is commissioned, with wastewater treatment to remain separate in Picton and Wellington with improvements and expansions phased for projected growth.

She reminded the Picton plant dates back to 1928, has significant structural process and electrical deficiencies, with only 10 years of life expectancy left as it approaches the end of its useful life.

Councillor Janice Maynard said she cannot in good conscious support something like this.

“We have to consider the times we are in, there is so much uncertainty right now. We could be in some critically serious times. We are in times that are way too uncertain,” said Maynard. “I do not think this is the time to jump off this cliff. What this is going to do is not fair and it’s not logical.”

Had council voted in favour of staff’s recommendations, they would have worked with developers in Picton and Wellington to identify and negotiate opportunities for development charge and/or connection charge pre-payment or front-end financing arrangements, with the objective of reducing growth-related municipal borrowing and the County’s exposure to the timing of future development revenues.

They also rejected the opportunity for staff continue to pursue available provincial and federal grant funding opportunities to reduce municipal financing requirements and impacts on existing water and wastewater ratepayers. And they also won’t be engaging with Infrastructure Ontario and other potential lenders, to confirm financing capacity, terms and financing options for the water and wastewater capital program.

Councillor John Hirsch was fully in support of staff’s plan, stating that the ‘do nothing’ option will increase the rate to the ratepayers even more than option 2B.

“That’s why that’s absolutely not an option,” he said. “The suggestion that no growth is happening is nonsensical. Base31 is selling homes starting next month. And those are hundreds of units. That is not fiction, that is actually happening. Port Picton is building homes as we speak in the Cold Creek sub-division, so growth is happening. Kaitlin is waiting for us to finally finish getting the pipes ready so they can start.

“If we don’t have a road map, the developers are not going to be interested in any kind of conversation. Not approving this roadmap gives us nothing to talk to them about.”

St-Jean said there is no good scenario here.

“These are big numbers. We are in a mess and this is a possible way out. Sticking our heads in the sand is not an answer.”

McNichol said “the financial requirements are significant” as he detailed how the debt could be serviced (development charges, up-front developer financing, etc.). He spoke to the County’s borrowing capacity, and the impacts on existing customers and future development.

“Can developer financing change the picture? It absolutely can,” said McNichol. “The potential benefit of pre-payment or front-end financing is significant. Regardless of whatever scenario is chosen, there is significant funding pressure, debt pressure, rate pressure and a significant amount on debt and capital and a significant amount of increases on our rates. Are they manageable? I think they are manageable.

“This amount of debt and the increase in rates makes me uncomfortable, but at the same time given that this is the best case scenario, I think it is manageable. Overall, sort of scary numbers, but if properly managed it could work,” he said.

In August 2024, council directed that construction of further water and wastewater infrastructure projects not already underway be deferred in order to minimize financial risk. McNichol states that in January 2026, staff presented a report regarding the implications of updated population growth forecasts on the County’s long-term water and wastewater infrastructure planning.

Three main fundamental problems had been determined some years ago explained McNichol, including running out of capacity, aging infrastructure, and the Picton water supply and intake issues, where staff were tasked with developing a financial strategy to come up with a solution to solve these problems.

“I don’t know how in good faith we can put this level of debt and rate increase on the residents when so much of the strategy depends on future growth and funding that we don’t have,” said councillor Corey Engelsdorfer. “I think it’s time for the development community to put their money where their mouth is.”

“Unfortunately, as uncomfortable as it is, we do have legal responsibility to provide services for the growth that developers are coming at us with, so we have to find a way to do it,” added Hirsch.

The staff report, Watson’s financing strategy report and the two presentations as discussed at the Aug. 27 committee of the whole meeting, can be found on the corresponding agenda item on the County’s website, along with the meeting recording.

Population forecasts settle on 1 per cent growth for County