Wednesday, November 6, 2013

Candid report on the Greater Vernon Water Master Water plan. Part 1.

It is time to discuss Greater Vernon’s new Master Water Plan (GVMWP). Let us investigate how much we have spent on it to date, what we have received for our money, what is still due from our pockets and what benefits we can still expect.

Directors of the Regional District approved the latest version of the GVMWP and forwarded it to Interior Health for approval.
At the Greater Vernon Advisory Committee level I was the only one voting against the Plan.

I would like to explain why I think the Plan is defective and does not meet our needs and expectations. It is up to you to decide if I am right or wrong based on this report. If you think I am right you, the ratepayers, should take steps to have your views heard by your political representatives at each level of governments.
This is the situation today:

We have spent between $66 to $68 millions for the GVMWP. For this we have received the following benefits:    
About 80% of mainly Vernon customers receive improved secondary treated (UV disinfected) domestic water from Kalamalka Lake (the Mission Hill Water Treatment Plant or MHWTP). Treatment costs in 2011 amounted to $625,577 or $0.13 per cubic meter (based on 4,828,000 cubic meters of billed volume). In 2012 treatment costs were $524,475 or $0.12 per cubic meter.
The rest of the domestic customers received treated water from the Duteau Creek Water Treatment Plant (DCWTP). This water is clarified using the DAF treatment system and chlorinated and is about the same quality as water from the MHWTP prior to UV disinfection. Treatment costs in 2011 amounted to $1,702,202 or about $1.11 per cubic meter (based on 1,530,000 cubic meters of billed volume). In 2012 treatment costs were $1,451,830 or $1.06 per cubic meter.
Two observations are clear:    
    1. The water treatment at the MHWTP is of higher quality than that of the DCWTP and

    2. The treatment costs of the lesser treated water at the DCWTP is still in the order of 7.5 times higher per cubic meter than the secondary treated domestic water at the MHWTP. Note that only a very small percentage of the water treated at Duteau Creek is for Domestic Drinking water consumption.  A total of 13,375 megalitres of water were treated at the DCWTP, with an operating cost of $1.7 million dollars. In the peak demand of summer 2011 the plant treated 160 megaliters of water per day. In the winter time, the water treatment plant only treated around 6 megalitres per day. That means that in the summer of 2011, approximately 96 % of the water treated at the DCWTP, was used for outdoor sprinkling and irrigation purposes .

    3. Most of the funds spent on treatment at the DCWTP is wasted on agriculture irrigation since irrigation water customers are not charged for the treatment costs, as the treatment is not needed for agriculture, then these costs are passed on to domestic customers only.

If we included the annual amortization costs for the construction of the treatment plant ($29 million plus) the unit cost of Duteau Creek water is even more expensive.
 It is safe to conclude that having spent 12 years and $68 million of taxpayers' money we did not achieve very much. What we did achieve is that we converted the low cost agricultural water to a high cost domestic system for all users.  
Unintended consequences?
The first major unintended consequence is that domestic customers are now paying at least four times as much for a cubic meter of water as they did prior to the year 2000. Current costs are about $1.80 per cubic meter if they use a lot of water and about $4.72 per cubic meter if their consumption is 20 cubic meters per quarter.

The second major unintended consequence is that agriculture customers with agricultural land classification and agriculture water allocation must fulfill rigorous requirements in order to receive the low rate for their land. Without affordable agricultural water there is no agricultural land in the Okanagan.
This has issue raises another problem. If a landowner does not get affordable water for his land, theoretically, he might apply to have his land removed from the land reserve. This would jeopardize the intent of the agricultural land reserve act.
The first MWP of 2002 clearly identified the problem with our water system and offered the most cost effective solution:

“Separation of the existing combined water system will provide the most cost effective water management in the long term."
Initially, all concerned endorsed the plan. For political reasons this direction was changed in 2004 and, as the authors of the 2002 MWP predicted, we have been paying for the water dearly and will continue to do so in the future. Plans for the future include filtration treatment at both the DCWTP and at the MHWTP resulting in even more expensive water to be used for agricultural irrigation.

To conclude this part of the discussions I am including various financial predictions and actual costs to document the accuracy of cost predictions.
The first table shows predicted costs for total separation as presented in MWP 2002. Note the total costs of $71.56 million by 2011. Compare it with the actual cost incurred of $66.4 million .

The second table demonstrates the projected costs prior to the 2004 referendum. Note what was promised for the $35 million and how much was spent. One might wonder if the additional $38 million spent was legal or at least ethical. What would the ratepayers think of a 90% overrun on the proposed sports field?

The third table demonstrates the difference between the predicted and actual expenditures from 2004-2013. Quite a discrepancy. One might wonder of the accuracy of predictions presented in the next table.

The fourth table presents the projected expenditures for the final version of the MWP. The additional expenditures of $108.2 million will provide a system that would dispose up to 10,000,000 cubic meters of filtered domestic water annually on agricultural crops. Based on previous evidence these cost estimates are highly suspect with regards to accuracy.

The last table provides an example of water budget escalations from 2006 to 2013. What will it look like once the additional $108.2 million is added?

How did we get to this new plan?

What will be the future with the approved plan?

I will discuss those issues in future postings. 


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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.