Monday, October 4, 2010

Readers write - - More sewer issues.

Last month I have received a complaint from Mr Jack Borden, owner of Coldstream Meadows (CM), objecting to my comments at the August 23rd Council meeting (see attached Document 1 a&b).

At this meeting I justified my protest vote against the proposed sewer rate increases as follows:
“The previous Council (2003-2005) took money from reserves and built a sewer line to Coldstream Meadows. That’s why we don’t have enough money now. We had reserves for these kind of occasions. (Morning Star, August 25)”
After considerable discussions Mr Borden forwarded an email to me requesting that I publish it on my blog and clarify the comments. The email in question is also attached (Document 2 a&b).

My clarification follows.

The outgoing Council of 2005 voted to remove about $665,000 from the capital reserves of the sewer utility to extend the sewer line from McClounie to Aberdeen Road. This action was done at the last meeting of Council prior to the 2005 elections and final adoption was done after the election at the last Council meeting of that Council. The question is: why was Council in such a hurry to spend those funds before the new Council was installed?

Here are some clues.

In October, 2004 CM, over the signature of Mr Borden, “encouraged” Council to extend the sewer line from McClounie to Aberdeen Road (Document 3 a&b).

This was done in anticipation of Council’s approval of the expansion of CM with the requirement that the development connect to municipal sewer service at the developer’s expense. “We do have a self interest in seeing the sewer extended...” wrote Mr Borden. At that time the closest sewer line was at McClounie Road. To be sure, I do not blame the developer for trying to get the best deal for the development but it is up to Council to ensure that the municipality gets some benefit from development instead of financing parts of it.

Council had staff hand deliver questionnaires to each household along the proposed sewer extension asking residents if they would be in favour of the extension. The overwhelming response was a resounding "NO". Most of those residents are yet to be connected to sewer. Thus, the question is: did they benefit?

Most residents along the new line did not benefit: in fact they are being charged an annual tax of $97.54 for 20 years as their contribution to a sewer line they did not want. This tax is charged even if they are not connected. Incidentally, it appears that CM is not among those charged the above tax.

Old customers of the utility whose funds were used to finance the project did not benefit from the new sewer line. They are the ones who lost the most and still keep paying for the ill advised decision their Council made. The current increase of sewer rates is a direct result of losing nearly a million dollars out of the utility’s reserves.

As Mr Borden states his contribution to the entire sewer line from CM to McClounie Road was $825,000 less the $250,000 Council of 2006-2008 spent on buying out the latecomer fees to which Mr Borden was entitled to collect for ten or fifteen years. A sum of $575,000 appears to be quite a good deal for about 2.5 km stretch of sewer line extension.

A previous development, Highlands, was required to connect to sewer at the developer’s expense. The developer financed all cost related to constructing a sewer line to 15th Street by the Health Unit including storage reservoirs and a lift station. That was the policy for Coldstream and it still is. Just three years ago a developer was required to build a sewer line down on Aberdeen Road if he was to receive the development permit. The development never happened presumably due to the economic down turn.

Thus, strictly speaking, previous Council did not build a sewer line to CM but CM definitely benefitted from Council’s action.

As for using capital reserves: there are all sorts of capital projects those reserves could have been used for such as replacing lift stations and replacing the main sewer line when the capacity is exceeded by increased sewage users. I should know, I signed the bylaw establishing those reserves.

The buy out funds were directly removed from the operational reserves, highly unethical and probably challengeable in court. However, not many of us have enough money to challenge our own Council which already has our money to use in defence of their action.

All those nice things, like removal of septic fields from CM’s property, connection of various customers along the line to the sewer system would have happened had CM constructed the entire line and started to charge latecomer fees to those who connected.

Once again, I did not blame CM or Mr Borden for Council’s action, I blamed Council of the day and my quote in the Morning Star reflects that.


1 comment:

Anonymous said...

Excellent info.

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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.