Editorial: Look forward to pay for water costs

A recent South Dundas council water budget meeting has staff preparing a report on a 15 year old capital water infrastructure payment plan, which could increase the financial burden on current users.

When the South Dundas water treatment plant was completed in 2007, unifying the drinking water systems of Morrisburg and Iroquois, certain capital costs needed to be paid by users. After much public debate, the council of the day settled on a two-pronged solution. One portion of the infrastructure capital cost was paid directly by users at $2,000 per household. Many opted to pay that in installments over five years which ended in 2012. To pay the other portion, a $1.6 million loan was taken out, for which the interest (not principle) is paid by all South Dundas taxpayers. Meanwhile, connection charges to the water system are collected and held in reserve to pay the principle on said loan. That loan is due in 2028 and there is a $1.1 million deficit in that reserve.

At the time, 485 new home connections to the water system were projected, which is 22-27 new homes per year. It was an ambitious but achievable goal, except a global recession arrived a year later which cut housing starts in the area. Since that recession, there has been residential growth on the water system but below projections.

Councillor Danielle Ward, who brought up the matter at the December 15 budget meeting, is right to be concerned about this looming reserve deficit. But potentially reopening a 15 year old plan to move this capital charge to existing users is the wrong approach. It sets a bad precedent for this new council.

Existing users of the water system already paid their fair share of the capital costs as agreed to in 2007. The task of meeting growth projections for new connections to fill that reserve was not the job of water users. That detrimental economic conditions and decisions of subsequent councils affected achieving projection targets was not the fault of existing water users. Not all councils between 2007 and now prioritized growing residential water connections.

Pouring further capital costs from 15 years ago on to current users at this point, is unfair. Some may challenge that having all taxpayers pay the interest on a water bill is unfair, but that slippery slope is a dangerous one to travel. Where does it end?

If water users can suddenly be stuck with an additional 15 year old capital expense on top of an already approved four per cent annual water rate increase, what could be next? Should capital costs from prior bridge replacements, road repairs, or arena improvements be re-examined and re-allocated to only those users who directly benefit?

A better play for Team South Dundas council is to focus on a strategy to fill that deficit void. Allocating the water connection charges for the nearly 200 units at Dutch Meadows will fill up a good part of the reserve. Encouraging residential development to move at a faster pace will also help. So will creating more opportunities for residential and industrial development.

Even though rural taxpayers do not directly benefit from the water system in Morrisburg and Iroquois, all boats are raised when the tax base grows. Council needs to look forward to solutions not backwards at old problems.

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