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Landowners facing mandatory hook up to lakeshore pipeline
By Liz Dadson

Kincardine Council

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Mandatory hook-up is proposed for all landowners fronting on the Kincardine drinking water pipeline along Bruce County Road 23 (B-line).

In committee-of-the-whole Wednesday night (Nov. 18), chief administrative officer John deRosenroll said the $2-million pipeline debt dates back to when the $5-million project was completed in 2004. Charges were based on property owners hooking up to the pipeline, voluntarily, over several years but that never happened, he said. Only 38 per cent of the possible customers have been connected, leaving a stranded debt of $1.9 million.

A six-point plan was outlined by deRosenroll as a way to manage this debt.

*All occupied properties along the pipeline will be given notice that by 2015 they must be connected and pay capital charges of $7,405.36.

*All vacant properties fronting the pipeline will receive notice that by 2015 they must pay capital charges of $7,816 as a future benefiting property.

*As of Jan. 1, 2010, all occupied properties fronting the pipeline will be charged a flat rate monthly water fee which will be attributed to the pipeline debt - that rate is currently $25/month.

*The current pipeline connection fee of $9,729.46 per property will be reduced, as of Jan. 1, 2010, to $7,405.36 per property.

*All landowners who paid the higher charge will be eligible for a refund to ensure payment fairness to all properties.

*As the development charges project takes place in early 2010, the Kincardine Shoreline Pipeline debt will be considered under "future capacity" to determine the portion of debt that the development charges bylaw could fund.

The pipeline debt continues to grow because interest incurred on the unfunded debt is higher than the rate of the optional yearly connections, said deRosenroll. This is becoming a problem from a cash-flow perspective as both the interest and principal must be funded from cash derived from other sources, he said.

"This pipeline has been a financial disaster likely from day one," said councillor Randy Roppel. "This is almost unexplainable. How can we do a project of this magnitude and not know how we were going to recoup the costs? I have no idea because I wasn't here when this thing was hatched.

 "When the project was originally presented, the public had the option of whether to connect or not, so people didn't connect. When you give people options, they will exercise their options. Has the public been made aware of this debt and allowed any consultation? And why has this gone on so long? Now, we're going to force people to connect? I think we should discuss the issue rather than go with strong-arm tactics."

"I've asked many times, what about the Hartwick property's share?" said councillor Ron Hewitt. "There are 850 homes proposed for that property (just north the Huron Ridge subdivision, west of the B-line). If it picked up a portion of this, there would be little debt left."

If the municipality had a plan of subdivision for the Hartwick property, the landowner would be charged the same as other developments, said deRosenroll, at $2,100/lot for a capacity charge. Then any surplus would go into the water reserve fund.

"I'd like to see a map of all the properties and a layout of the financials so I know where we stand for future prospects," said mayor Larry Kraemer. "I'm not clear on how the costs were distributed and how the formulas were determined. We have to make a decision so we need to see detailed information and understand all the components."

Deputy mayor Laura Haight said the public works committee was reluctant to bring this issue forward because it requires a good three-hour meeting with all of council to get a thorough understanding. "The six-point plan is an option to get this sorted out," she said. "We should have a special meeting on this issue in the new year."

"Laura (Haight) is right," said councillor Marsha Leggett. "There's an election next year and a new council; we don't want to dump this on them."

Haight added that the problem is not just properties that did not connect to the pipeline, but there are many landowners who want to hook up but were unable to do so because of the policies in place at the time. "There are a lot of details," she said. "In order to make a good decision on this, we need to understand it better."

Council agreed to hold a special meeting in the new year. It will be held in the council chamber, open to the public, and it will be televised. After that meeting, council will decide if an open house is required.

 

 
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Monday, November 23, 2009