Wellington water woes pour out over costs, what-ifs and complicated process

By Sharon Harrison
“The biggest question in the room that everyone is worried about is, what if they don’t come?” asked one Wellington on the Lake resident who took to the podium. “What if they don’t come, what if they don’t build?”

The Wellington water and wastewater infrastructure public information meeting held at the Wellington and District Community Centre Thursday night was met with a full-to-bursting Highline Hall. Many who spoke indicated a distrust of developers and concern they won’t keep their word to help finance a portion of the enormous waterworks upgrade costs.

Simply put, the sentiment expressed by many Wellington residents present at the special meeting was one of concern at the huge cost and undertaking of capital water and wastewater infrastructure projects needed in Wellington due to aging and inadequate infrastructure, but also to allow significant growth with new residential development planned.

In part, concern was expressed by members of the public noting contributing factors such as a slowing economy, the effects of the pandemic, a housing market slow down and a series of quickly-rising interest rate hikes as reasons why developers may walk away and decide not to build here.

If the anticipated homes are not built timely, and upfront development charges (DC) are not forthcoming, residents expressed fear the cost of essential waterworks upgrades and necessary expansion will be borne by water ratepayers in the form of higher and higher water bills, with some noting that their water bills are already too high to be affordable.

“People are concerned, and rightly so, about rates rising. It is very top of mind to keep rates stable, and it’s why we plan for infrastructure,” CAO Marcia Wallace told the crowd. “We all understand that the water rates are high. If you want to know why the water rates are high, it is because we have a water system that we inherited through amalgamation of six separate systems and not enough people to pay for it. We are using growth strategically to be able to finance what this community cannot afford to pay on its 6,500 ratepayers.”

“If we could cut water rates, we absolutely would, but right now most of our rate budget is paying for [old] debt. It is not sustainable to have water rates that high,” she said. “Fundamentally, our objective when building infrastructure to support the community is to keep the rates stable, or to find ways to lower rates.”

“Not having not made long-term decisions in the past in this community has hurt us and has made it ever more difficult, but we have done tremendous work in the last five years to rectify some of that, and plan better for the future so that we can keep costs in check.”

It’s a big topic and it got a big response where the overwhelming message from members of the community at the meeting was one of asking for transparency and respect from those leaders who make the big decisions when it comes to water and wastewater infrastructure in Wellington, but also across the County.

“I think the people who pay the water bills are completely left out of the decision making. We need a water commission in this County that includes councillors who pay water bills, and residents who pay water bills,” said one WOTL resident.

The tension in the room could be felt as some residents expressed upset and anger about a topic and discussion they have felt left out of, where decorum spilled into sarcasm and inappropriateness at times, and not just from members of the public as frustration rose in the room and respectful conduct was sometimes forgotten. Applause and cheers were also plentiful from those posing questions from the audience, but disgruntled groans were noticeable too, along with adversarial remarks.

Wallace noted the purpose of the meeting was to slow down the conversation and help the community understand how they got to this place, the evidence based decisions that have been made, what decisions council and the community already made, what are they implementing, and where are they going next.

“When we look at this plan, there are two really important elements. One is that we are always looking to keep rates stable or find ways to reduce rates, that’s our whole goal,” Wallace said. “And a big part of why now is the fact that we will eventually need to replace plants, we absolutely needed a new water tower for fire suppression and water pressure, but we need the new plants eventually.”

“We can fight about whether we need to plan for them now, or in five years, but the strategic reason for doing it now, is that now we are seeing growth, and if we get this put in place now, we can then use what is called development charges (DC) to help pay for this and it’s really as simple as that.”

She said if they wait until the houses are here, whether they come or not, the County would pay 100 per cent of the cost.

“If we build it now and work it into a development charge framework, then whether or not the houses arrive tomorrow, next year, five years from now, the development and growth of that, it will be the developers paying 75 per cent of the charges. It is really that simple.”

Also present to help answer questions were senior County management and consultants, including mayor Steve Ferguson, Peter Moyer (director of development services), Amanda Carter (director of finance and IT), Michael Michaud (manager of planning), David Macpherson (manager of engineering), as well as consultants Bradley Young (CIMA project manager), and Jamie Cook (managing partner at Watson & Associates Economists).

The aim of the public information meeting was to provide a summary of information on the approved Wellington master servicing plan study and the development charges study, both completed in 2021.

While information boards were displayed in the adjacent Rotary room, staff each provided a presentation outlining decisions made to date, as well as the engineering, financial and growth projection context for infrastructure planning in Wellington and across the municipality.

The revised meeting format was changed to expand the format at the request of Dorothy Bothwell who came before council last week with the request due to ongoing concerns from citizens.

“I fully recognize that there are many questions concerning water and wastewater, and there has been a considerable amount of conjecture, speculation, heresay and a whole bunch of different things, and the purpose of this meeting is to explain exactly what the municipality is undertaking, and why,” outlined mayor Ferguson, who described the projects as “very complicated”.

Following the presentation, attendees had the opportunity to pose questions to the panel to answer questions and seek clarification, of which there were a number.

Wellington resident and business person Evan Nash spoke to the commercial component of new growth, referring to a commercial needs study undertaken by Watson’s.

“You are going to hear a lot of people complain about what this is going to cost, the economy maybe not being what we thought it was going to be, the hoards of people not coming here like we thought they were going to,” outlined Nash.

He noted a Watson’s study indicates just shy of a million square feet of commercial space will be needed, and “that million square feet is going to help fund this water plant”.

“How many Costcos can that be, four or five?; Belleville’s got 56,000 people and it took them two decades to get a Costco,” said Nash, who then asked how many people wanted box stores put all around their town.

“So, are we going to have 80,000 cafés that are going to make that million square feet of commercial space?” he asked. “What does a million square feet do to the economy here, also is there a lot of office workers here, everybody goes to Belleville to shop, have you factored in all of those things. How do we get these numbers?”

Referencing the recently-formed Wellington Community Association, Nash said they are trying to push for “really good quality development because I don’t think anybody here doesn’t want development, we know we need it, we want this all to happen, but we want good quality development, and this town deserves it, and we’ve put in the work and we deserve good quality development”.

He said someone in the group qualified to do this sort of thing, did the study herself and came up with 240,000-250,000 square feet of commercial space needed to service the support of all the growth.

“It seems like you have made a study that says what you want it to say to justify spending the money, and we haven’t heard a number yet today at all,” said Nash. “It feels like you are basing these numbers that you have on studies that tell you what you want to hear and not what the actual facts are.”

Wallace noted the trend in the County means 80-90 per cent of taxes collected come from the residential side, not from commercial or industrial sources.

Gary Mooney, who noted his half-century of doing long-term financial projections, said the first thing that bothers him is the population projections: “What if they don’t come? I worry about what happens if we don’t get the growth and the extent of which we will be on the hook for a lot of cost without the people to pay for it.”

He noted that 60 years ago, the County had 19,000 people, now we’ve got 25,000, with a rate of growth at 0.3 per cent per year for 60 years. Further, he notes in just the last 10 years, growth has slowed down to 0.2 per cent.

“What I heard was that the people doing projections paid close attention to what’s happening in the last five years, and that growth has been four per cent over that period. That’s really dangerous to look at too short a period,” Mooney explained. “I’ve seen numbers to suggest that Wellington’s going to go from 2,000 to 14,000, Picton from 5,000 to over 30,000.”

“I can give you 12-15 reasons why a lot of this growth may well pass us by, and the sense I get is that the projections have been done on a macro basis, looking at Ontario as a whole, looking at the region as a whole, maybe even Belleville as a whole; the County is not Belleville and there’s lots of reasons why Belleville will grow and the County doesn’t grow.”

Mooney also spoke to one audience member’s mention of how the County has the highest water and wastewater rates in Canada.

“He is very close,” said Mooney. “Six or seven years ago, I spent many hours looking at rates all across Canada, at that time the County had both water and wastewater rates in the top two per cent in Canada, and I doubt that there has been any improvement since then.”

Wellington resident John Whyte, expressed concern about the main developer planning to build thousands of home in Wellington

“I have heard that we as residents don’t have to worry because the developers are going to pay 75 per cent,” said Whyte. “I think we all know that (one) right now has huge… challenges, so the guarantees that you have to collect that money from them is fantasyland… what’s plan B for covering 75 per cent of that $100 million?”

Amanda Carter, director of finance and IT, reassured that the County holds a $4.4 million in a secured letter of credit which means it’s a demand loan.

“We can cash that in the minute that they don’t meet their end of the agreement; we can call on that, and we would,” said Carter.

Whyte countered by saying, “Doesn’t that assume that the money is there for us to collect, and the reality is if they close up shop, and if they declare bankruptcy, 75 per cent or a portion of is nothing?”

Carter said even if the builder would declare bankruptcy, the County can still call on the letter of credit because it’s held with the bank, to which Whyte decided the County would “then get into a whole legal procedure and that could take years and years and years to collect.”

She further clarified the upfront financing agreement means the developer will pay the DC at the draft sub-division approval stage (something she said was very close) which will see around $11 million received for the first phase of development charges.

“Receiving those development charges upfront will allow us to finance the debt cost incurred,” Carter said.

Resident Dorothy Bothwell, said she was representing over 640 residents of WOTL, said “the upfront agreements are not a guarantee that the County is going to see those funds, or the population growth,” and asked if it was “a guarantee we will see those people coming”.

“We are asking you to slow down, to press pause, to re-assess those assumptions, re-assess that financial risk and commit to continue to engage with your people in your community and keeping us in the loop as to what you are doing and being transparent moving along in the decision making,” Bothwell added.

Addressing an audience comment about Kaitlin Corporation waiting until 2026 to build, Wallace said that was why the County got the upfront financial agreement.

“In part, so that the letters of security, so that they cannot wait forever, and we are at a place that, as soon as the trunk line goes in, they will have to pay for the DC for the units that they will be able to build,” said Wallace. “They had to pay upfront for the securities and we had to install the infrastructure for them to connect. Once we get the trunk line started at the end of construction, then they will pay their DCs for the portion.”

“If they chose to fold their arms and say we are going to wait, then we would call the mark and we would collect the securities,” she said. “The agreement does not allow them to sit back and wait, we have a time limit on that; they can’t just sit and wait until 2026.”

Wallace also reminded that Wellington ratepayers don’t just pay the Wellington costs for water.

“The water rates are across the County, we don’t have area-specific rates, we have County-wide rates which means all of the people who are hooked-up to water pay those rates, so it’s in the interests of all of those ratepayers if we can lower the cost for the whole system. “

Another WOTL resident noted how they have been told the new water main is going to end at Prince Edward Drive.

“That means that over 900 people who live in Wellington on the Lake are not going to get one iota of benefit from this whole new system, but we are all going to be paying a water bill,” she said. “I think that is bloody unfair, I am sorry, but I just think it’s wrong.”

David MacPherson, manager of engineering, explained how the Wellington on the Lake system is a private system.

“With the main improvement we are tendering right now, we are upsizing the main to the municipal boundary where it connects to WOTL,” said McPherson. “That will provide increases in fire flow and pressures just because we are bringing a bigger pipe in with a water source to the boundary, so there will be benefit to WOTL.”

It was clear at the meeting many people were confused about costs and the lack of mention of costs for all the proposed water projects, as one individual asked directly what kind of dollars the County is looking at.

Staff revealed the cost for the full phase one solution would be $37 million, and this does not include the trunk lines which have yet to go to tender (approximately estimated at $15 million).

The water treatment plant for Wellington alone will be $30 million, plus $10 million for a new intake.

Regionally, the figure is $58 million, which doesn’t include the trunk line from Wellington to Picton, where it was noted that staff cannot yet speak to the Picton and regional numbers since it is still early days in the process. It was noted that Picton will also need a new intake at the cost of tens of millions.

Carter noted that $79.9 million has already been approved in the 2023 budget for the total cost of the project, but that doesn’t include the regional study or the master servicing plan.

Wallace reminded that regarding infrastructure capacity in Wellington, there is no more capacity to hook new development up.

“Whether it was an infill development within the old town, or whether it’s new development on the fringe, we don’t have the capacity and that is what started the infrastructure work in the first place to support new housing,” she said. “If there was an apartment building built on main street tomorrow, we could not attach it to the system because we have hit the capacity of what the plant can handle in a peak situation, so we have to build something to deal with the current situation.”

She said, if the County can build now, and plan now, the County can have developers pay for this growth to the tune of 75 per cent of the total cost, “which is frankly unaffordable for this community to be doing it any other way, and if we wait, we will end up paying the full cost of what new plants would be required”.

“Even if growth wasn’t coming, even if you could pretend that we were not going to grow, and those decisions have already happened so you can’t turn back the clock, but even if you could, there still is tremendous infrastructure that has to happen when plants get to their natural lifecycle, so there is a need to move forward, the question of how fast and when is really being driven by what makes the best financial sense to the ratepayers.”

Wallace explained that the rate residents pay for water is looked at every five years, where she emphasised that Wellington’s waterworks project is already factored into the rates residents are paying today.

Responding to those calling out the County for its lack of transparency to the public on the issue, mayor Ferguson said, “If the information is not being provided and understood, then we will make sure it is being understood; of course we are going to be transparent, why wouldn’t we?” he stated when the question was posed.

The recording of the Aug. 31 public meeting, along with the information slides is expected to be available on the County’s website in due course.