More sewer issues.

Sewer Issues

At the last Ratepayers Association meeting members requested that I present a comprehensive review of the sewage issue. This presentation is an attempt to comply with that request.

The above link will take you to a document on Coldstream’s website. That document contains my official complaint regarding the actions of Council of 2005 in extending the sewer trunk line from McClounie to Aberdeen Road at the expense of the existing sewer customers (Sewer Specified Area 1 or SSA1). It describes what the proper procedures should have been in establishing the Specified Sewer Area 2.

In response to my complaints there is a letter from R. B. Cockburn CA, Coldstream’s Auditor, stating that according to Mr Christopher Murdy, solicitor of Murdy & McAllister, the District of Coldstream acted within its authority with regards to the sewer extension.

Notwithstanding the fact that a solicitors opinion is not necessarily the final word (if it were there would be no court cases!), there are other issues besides the legality of Council’s actions. Council also has a moral obligation to be fair to ALL of its constituents. Council did not live up to its moral obligation.

Here are my major concerns in a nutshell:

1. The sewer trunk line from McClounie to Aberdeen Roads (a distance of over 1.5 km) was constructed mainly to benefit one developer. A sum of $665.000 was removed from SSA 1 Capital Reserve Fund to cover the cost of this project. The developer in turn connected to the first sewer line via a sewer line of his own through Mackie, Pine and Giles Drives (a distance of about 1.0 km).

No taxpayer should be forced to expend funds to pay for a project that is for the benefit of a developer.

2. In their rush to award the contract for the construction of the first line before the 2005 Municipal Election Council neglected to carry out their major duties of:

a. defining the boundaries of the specified area;
b. preparing detailed plans for the entire project;
c. obtaining support from residents abutting the sewer line extension (in fact most residents strenuously opposed the plan) ;
d. prepare proper financial plans, obtain grants;
e. obtain necessary concession from SSA1 customers for financing the project;
f. obtain concession from residents along the sewer lines to pay for the project.

As a result of Council’s action they seriously depleted both the Sewer Capital Reserve and eventually the Sewer Operating Fund. Their action jeopardizes the necessary replacement of lift stations and other capital projects. It also necessitates continuous major sewer rate increases to SSA1 customers. In 2007 and 2008 rate increases totaled $60 ($32 and $22 respectively).

Another result of their action is that 87 properties abutting the sewer extensions are now responsible for an annual tax levy of $97.54 for a sewer line they did not want and to which most of them are not connected.

Here is an IMPORTANT note: had we borrowed the funds from the Municipal Finance Authority the annual repayment for the $1,390,515 cost of the project would be under $120,000. The combined annual income from the 87 residents along the sewer line and the increase in sewer rates of SSA 1 customers amounts to just around $128,000. The annual repayment of borrowing the $1,390,515 is under $120,000.

What does this mean? It means that we did not need to spend reserves to finance the sewer extension. The sewer rate increases in SSA 1 and the tax levies in SSA 2 would more than cover the cost of financing the entire project through MFA. The way it is now the reserves are gone and SSA 1 customers have to repay it via ever increasing sewer rates.

My proposal would rectify this situation: the reserves would be restored and the rate increases and taxes would cover financing charges. Continued rate increases would not be necessary.

In order to elucidate the issue please click on the attachment.

Constructive comments, critiques and observations are welcome!

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