South Frontenac Council - Apr 11/13

Wilma Kenny | Apr 11, 2013

Sydenham Water: still $1 million short – a primer

Treasurer Louise Fragnito came to South Frontenac Committee of the Whole to ask for direction in addressing three financial questions related to the Sydenham water treatment plant: unfunded liability, user rates and the need to build a reserve fund for future capital replacement.

As of the end of 2012, $1,018,886 remains unpaid, or in 'treasurer-speak' an un-funded liability, while the projected reserve funds which were to have come from user fees have been largely eaten away by the escalating operating costs of the plant.

The Unfunded Liability

This has two parts: A) from the beginning, the Township agreed to temporarily carry $530,550, an amount projected to be paid off as new connections, such as subdivisions, are created. This year, a new subdivision within the Sydenham area is projected to contribute $155,330, which would reduce this portion of the debt to $375,220. Utilities Kingston, in cooperation with the Township's Public Works

Department, is conducting a capacity study to confirm the system has sufficient growth capacity to eventually pay off the remainder.

B) is the township's portion of the nearly $1 ½ million cost of the plant upgrade, to improve the treatment process. (This was necessary because the combination of chlorine and organic matter that passed through the filters in the original design led to the development of potentially dangerous chemical by-products.) The federal and provincial governments each covered one-third of the upgrade, but the remaining third was a township responsibility.

There was a lawsuit, presumably against the original designers of the system, which the township won. However the details of this have never been made public, and $488,336 remains outstanding.

Previous councils have always been very clear that the price of Sydenham water treatment is a Sydenham, not a township responsibility. Sydenham presently has 174 active water users: the remaining 104 are not connected to the system, but are required to also pay the basic mandatory user fee of $41 a month, the cost of 18 cubic metres of water. Fragnito could not say what actual volume of water the average household currently uses, but she has agreed to provide that information.

The township has an Investing in Ontario reserve of $300,698, which could possibly be indirectly used to help pay down a large part of the township's portion of the upgrade.

However, this is money that would otherwise be available for projects in other parts of the township.

User Rates and Capital Replacement Reserve

The news only gets worse: the current operation of the plant is not generating sufficient funds to both cover operating costs and build a reserve for future capital costs to replace/repair plant parts as they wear out.

Where Next?

Public Works and Utilities Kingston are working on a new water rate financial plan to bring to Council later this year, which will take into account projected capital replacement costs, present and projected operating costs, and inflation.

As for the nearly half a million upgrade, Council had no easy answers. Councilor McPhail made a notice of motion to come to the next Council meeting, directing staff to look into the possibility of reopening negotiations with the School Board, which made a substantial one-time payment toward the original cost of the water system, but does not pay any ongoing user fees.

And The Good News

Sydenham water remains free of harmful by-products, no longer smells or tastes of chlorine, and is reasonably soft, therefore much easier than local well-water on taps and appliances.

Major Changes Coming to Local Waste Sites

When it comes to garbage, South Frontenac is facing some big challenges:

• The provincial government is continuing to tighten its rules around waste site capacity and management (they're not pleased that Portland's once reassuringly large capacity is mostly in the swamp),
• It costs a lot to keep five waste sites open and staffed for a total of 87 hours a week,
• We - all of us - are producing more and more waste every year,
• South Frontenac residents do not recycle/divert nearly as much waste as they could, or as many other municipalities do, in spite of weekly curbside blue-box pick-up.

In February, Council approved a new waste disposal operational plan intended to address some of these issues. As of May 1st,

• Portland and Loughborough will be open two, not three days a week; Salem, Bradshaw and Green Bay one day a week each, with some of Bradshaw's summer hours moved to Sunday,
• Salem, Bradshaw and Green Bay will accept no waste other than tagged household garbage (Portland and Loughborough will accept neither of these.)
• Portland will take large articles, mixed loads, brush, shingles and construction waste,
• Keeley Road (household hazardous waste) is the only site for small appliances, e-waste, hard plastics, bale/boat wrap and hazardous waste,
• Loughborough will accept large articles (furniture) and construction waste.
• A weigh scale will be installed at Portland, and tipping fees have been raised to more closely match those of neighbouring municipalities.

Implementing these measures, with residents' cooperation, should extend the township's landfill capacity until 2032, and result in a savings of more than $7 million over twenty years.

With full awareness that change is never easy, and that some of these changes will be controversial, the Public Works Department has set up two public information sessions next week: Wed. April 17 at Bedford Hall,1381 Westport Rd, from 7 - 9pm, and Thurs April 18, Verona Lions Club, 4504 Sand Road, 7 - 9pm.