Sunday, July 29, 2007

Sewer Complaint

At the July 3rd special Council meeting Catherine Lord presented a report defending the decision made by the previous Council regarding the construction of the sewage trunk from McClunie to Aberdeen Roads using $625,000 from the Sewer Capital Reserve Fund (SCRF). She also attempted to justify the expenditure of $264,000 from the sewer operating surplus for the Latecomer buyout of Coldstream Meadows Property Management Ltd (CMPML).

As a member of three previous Councils (1990-1999, three years as Mayor) I am intimately familiar with the issues relating to Coldstream’s sewer service. I have also been a customer of the utility for 30 years and am painfully aware of the exorbitant user fees charged by the utility (currently $540 flat rate annually regardless of usage). This is by far the largest service cost within the Municipality. Ironically, six of the seven Council members of the previous Council were not and five members of the present Council are not customers, thus, they were not affected by their decisions.

I take issue with some of the explanations made by Ms Lord regarding the utility and the way the new service was introduced. In fact, I believe that the service is nothing more than a publicly financed private connection for CMPML. The decision to construct the trunk line came in response to the request from CMPML (see attachment A, highlighted). An earlier survey of residents affected by the sewer extension was overwhelmingly negative. Residents living along the sewer line are not forced to connect to the service while CMPML is mandated to do so by their development permit.

Following are comments in response to Ms Lord’s report.

In order to create a new Sewer Local Service Area (SLSA) there are other certain protocols that have to be followed. The geographic area must be delineated, financial plan must be created, etc. According to Ms Lord Bylaw 1488 created a new service area from McClounie to Mackie Drive. While it intends to recover 7% of the total cost by taxation it does not require residents to connect to the service. It also neglects to charge user fees from those residents ($540 per year) while it is collected from all other users from Area #1.

The financial implications are extremely important. Council made its decision based on the premise that the original sewer customers only paid 7% of the total capital cost of the sewer service and they insist that new customers should also pay 7% for their service. This is a misconception. First of all, the referendum in 1975 only passed because the grants were provided. A previous referendum failed to pass. Second, the initial sewer users paid not only for the construction of a trunk line but for a whole sewer system. This included:

the purchase of 8.75% of the sewer plant of Vernon,

paying for extra capacity of the collection trunk lines delivering sewage to the sewer plant,

construction of numerous lift stations,

purchase of 8.75% of the lands used for wastewater disposal,

purchase of 8.75% of disposal equipment including sludge disposal trucks, Bower guns, etc.

In addition, following arduous negotiations with Vernon for the renewal of the sewer agreement Vernon insisted that, in order to agree to the renewal, Coldstream was to contribute to Vernon’s policing costs. A total sum of $600,000 surcharge was paid to Vernon between 1995-1999. This surcharge was paid by sewer customers only.

Of course, sewer customers also contributed to the grant funds through their taxes, thus the 7% myth is just that, a myth. There was a lot more for them to pay than what Council wishes to recover from their present customers. Ironically, five of them will eventually reap the benefit of the low cost service whenever they are able to connect.

The whole idea of transplanting conditions of thirty years ago to today’s era are totally outlandish. Pollution of Kalamalka Lake was a major concern as it was the source of domestic water and government incentives were needed to have the referendum approved. Even so, those customers sacrificed a lot for giving up their septic tanks for the new sewer system. In 1980 $81.68 of my total tax bill of $496.10 was for the financing of the sewer infrastructure. Bylaw No. 1488, 2007 levies a tax of $97.54 per property which in 1980 dollars would the equivalent of about $6.00. So much for the myth of 7%. What Council and staff chose to ignore is the fact that 7% of a multimillion dollar project may be a lot more than the whole connection project to the existing system.

If Council wished to get grants, they should have demonstrated an urgent pollution concern. Obviously it did not exist as even now the only area that could be connected to the system are those living along Kalamalka Road, part of Giles Drive, Pine Drive and part of Mackie Drive. Even these residents are not required to connect as there is no bylaw to force them.

Ms Lord argues that most of the money in the SCRF was the result of MFA refunds and interest and the Ministry of Municipal Affairs recommended that these funds be spent on future capital sewer projects. The Ministry was also aware of the fact that the lift stations within the sewer area needed periodic replacement. Cost of these replacements run between $300,000 to $500,000. Council of the time reserved these funds for replacement of these structures. Today’s Council obviously is not concerned that if they rob the above fund to finance a private connection, the present users will have to replenish the reserve from their user fees. It won’t affect them. Financing of a private connection to the sewer system is hardly an appropriate use of these funds.

Buyout of the Latecomer fees is another improper use of sewer customers operating surplus. I have the financial report from 2005 and 2006 showing the cost of collection and treatment of the sewage as well as the revenues from fees as follows.
2005 Sewer revenues $888,488 Paid to Vernon $453,740 Collection costs $303,937 Surplus (percent) $130,811 (17%) 2006 Sewer revenues $998,129 Paid to Vernon $453,708 Collection costs $338,238 Surplus (percent) $206,183 (26%)

In spite of this surplus, this years fees were raised by 6.3% which may result in an estimated additional surplus of 30+%. Surpluses of this magnitude are well above reasonable. These are the funds that were used by Council to buyout the latecomer fees. Council exceeded its power in presenting a gift to a developer by inflating service fees.

It appears that CMPML received a tremendous deal for their development from a friendly Council. I, however, object to having my hard earned money spent on fees and taxes used for the financing of a highly profitable development’s sewer connection.

Bylaw No. 1480, 2006 also sets out user rates. Single residential is set at $127.00 (now $135.00) per quarter ($540 per year). Multiple family units, however, pay by the user pay system. Under this system a flat fee of $63.50 is charged plus $0.33 charged for each cubic meter of water used. It also appears to be a sweetheart deal. Under this system my annual sewer fee would be about $260.00 as opposed to the $540.00 I am paying.

Friday, July 27, 2007

Democracy in perill.

It appears that we are gradually losing our democratic principles.

We had a Water Referendum in 2004 but it was not really a referendum. The only question asked was “how do you wish to pay for our half-baked water plan: at once or in installments?”. Not the expected “here is our plan or plans, these are the pros and cons for each with the associated costs and time lines. Do you like the plan or which plan do you like and are you willing to pay for it?”

Taxpayers thought they had no recourse and they stayed home in droves. The result was that less than 10% of the eligible voters voted in favour of borrowing but we borrowed anyway.

What did we get for our money? Very little, those who had the poorer quality water are still boiling their water at frequent intervals yet they are paying more than double of what they paid in 2000.

Then came the famous Coldstream Municipal Office/Fire Hall fiasco. The referendum was defeated but the Municipal Hall was built anyway. We dropped the more important portion of the referendum: the Fire Halls.

In 2005 Coldstream Council extended the sewer connection from McClounie to Aberdeen Roads. Cost: estimated at $650,000. No input from residents except for Coldstream Meadows which requested the line as their development was contingent to sewer connection. So we gave them a small gift. Who paid for it? The existing sewer users. They lost $625,000 from their Sewer Reserve Found which was originally established to replace such important parts as the lift stations and grinder pumps.

To top it all, Council, in 2007, bought out the Latecomer fees from Coldstream Meadows for a paltry $264,000 (including GST). Where did this money come from you ask? It came from the operating funds of the existing sewer users. How did we manage to provide such a wonderful gift? Councils have been overcharging sewer users for years. Here is an example:


Sewer revenues $888,488

Paid to Vernon $453,740

Collection costs $303,937

Surplus (percent) $130,811 (17%)


Sewer revenues $998,129

Paid to Vernon $453,708

Collection costs $338,238

Surplus (percent) $206,183 (26%)

Since we only paid 26% more than needed in 2006 Council raised the sewer rates by 6.3% for 2007 ($540 per year).

This is mind boggling! Those who never contributed a nickel to the fund are getting monies from those who have been gouged for years.

Then there is the present fiasco within the City of Vernon regarding the Library/Civic building. I let that go for city folks.

We have a new issue in Coldstream. Council (at least some members of Council) wishing to request that about 106 acres of prime agricultural land be permitted to be used for non-agricultural uses such as playing fields, stadium, banquet halls and a 1000 car parking lot. The sad thing about this is that it was thrust upon residents without prior warning and only a last minute drive to get residents informed prevented the immediate approval of the proposal.

A decision is expected at a special meeting on September 11 in the gymnasium of the Coldstream elementary school.

Please express your views to Council and/or by responding to this writer.

Coldstream Ratepayers News! All Coldstream residents are ratepayers!

The opinions expressed by "Coldstreamer" are strictly his own and do not represent the opinions of Coldstream Council!

Because I value your thoughtful opinions, I encourage you to add a comment to this discussion. Don't be offended if I edit your comments for clarity or to keep out questionable matters, however, and I may even delete off-topic comments.

Gyula Kiss;


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About Me

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I have been a resident of Coldstream since 1976. I have had 15 years of experience on Council, 3 years as Mayor. As a current Councillor I am working to achieve fair water and sewer rates and to ensure that taxpayers get fair treatment. The current direction regarding water supply is unsustainable and I am doing all I can to get the most cost effective water supply possible.