Prince Edward County’s Newspaper of Record
October 5, 2024
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NewsAugust 21, 2024Volume 194 No. 34

Waterworks Fact Check

The Gazette examines the claims made at the Wellington Community Association event held at Highline Hall on August 12.

Claim: Population growth in PEC is slowing or almost non-existent

The Ministry of Finance growth rate projection for Prince Edward Hastings has almost doubled over the last six years, moving from .8% to 1.5% per year between 2018 to 2023.

Watson and Associates notes other areas of Eastern Ontario are growing at a rate of about 1.5%, and 1.8% in Ottawa.

Watson projections (in the PEC Hastings Regional Growth Study Final Report 2023) for PEC are lower than those of the Ministry of Finance, but still clock in at an average of 1.1% per year between 2021 and 2031. Hauled before the Audit Committee on August 8, Jamie Cook defended his company’s forecast and explained the various factors it considered, while noting the provincial growth forecast is moving steadily upward. He noted that Watson tends to err on the side of the conservative, or lower, growth estimate.

Over ten years, a conservative outlook says the population of PEC would increase by 3600 — over 10%, from 26,500 (current) to more than 30,000 people. Over 30 years, that means an increase of about 30%, or 9700 more residents, concentrated across Picton and Wellington.

Current population numbers come from the 2021 Census, which reported an increase in population over the 2016 census of 3.9%. Indicators suggest that growth trend continues, but won’t be fully captured until the 2026 Census.

Other factors: conversions, that is, people who already live here part-time converting to full-time residents. PEC has about 7,000 – 8,000 seasonal residents not included in the permanent population. Shifts in lifestyle post-pandemic mean more people are seeking homes outside expensive and crowded urban centers; and some can arrange to work from home a few days a week, giving more flexibility in decisions about where and how to live.  

It is worth noting that Watson also forecasts an annual employment growth rate of 2% for the next ten years in PEC. That is well above the historical average of .6%.

All information presented here comes from reports and studies available on the County’s website and in its Document Centre.
For all current development applications, check the Application Portal.
If you are having trouble finding anything, file an action request on the “Contact Us” page of the County website.

Claim: The County could end up carrying the debt of any waterworks infrastructure expenditures for a decade if developers don’t develop

Developers are here and they are developing. Or trying to. They need a guaranteed water supply before they can build. Sterling Homes wrote to the County demanding a guaranteed water allocation so it can build a new neighbourhood in Wellington. In Picton, developers are racing to get service locked in; without it they cannot secure financing. PEC Community Partners at Base31 has invested $50 million dollars in the three years since it purchased the Camp Picton property, including $12 million for waterworks infrastructure. Shovels are in the ground there already. Huge ones. But the partners are now worried: if the County does not proceed with its planned regional water infrastructure, the consortium, which got Official Plan Amendment approval this year to build 7500 homes, will not be able to proceed. Other developers with applications in the works, Hilden Homes and Port Picton Homes, are in the same position.

Claim: with interim servicing complete in wellington, we have enough capacity for 400 homes and that’s all we need for a decade 

Wellington has enough capacity for an additional 300 homes. That puts the County at odds with the Provincial Policy Statement, which mandates municipal water systems must have 3-5 years’ worth of additional supply available. Further, the existing WTP is at end of life.

The 2021 Master Servicing Plan identified the following key constraints on the Wellington WTP: “The rated capacity of the Wellington WTP is 2,488 m3 /d; however, the treatment plant’s reliable operating capacity is only 1,225 m3 /d. Historical maximum day water demands have exceeded the WTP’s reliable operating capacity. The existing WTP’s rated capacity is not sufficient to support forecasted growth. There is a need for expansion to meet imminent and future development growth.”

As for Picton, the Regional Servicing Study stresses its infrastructure cannot support either immediate or long-term needs. A new Picton WTP will be needed by 2032 — about 7 years from now — while current operational practices are complex and costly due to aging pipes and treatment systems.

The potential for the contamination of Picton Bay, which supplies the drinking water for both Picton and Bloomfield, is a serious, ongoing concern.

Claim: We don’t need a regional plan

A regional WTP offers a chance to consolidate rather than duplicate. One regional plant means $250,000 in savings every year in maintenance costs. Recent estimates suggest building one regional WTP, even with the piping required to service Bloomfield and Picton, would be less expensive than building two new WTPs. A new Picton WTP is estimated at $95 million.

Claim: Millions of dollars are being spent by Shire Hall assuming the County will double in size over twenty years

Growth projections employed by CIMA, the engineers hired to do Environmental Assessments and Master Plan Studies, employ low, medium, and high growth scenarios over long intervals. The engineers routinely take the highest growth scenario possible to plan capacity. For Wellington, for example, the engineers project a maximum population of 8600 in 2047 (20 years from the opening of the new plant, expected 2027) and 14,500 at “full buildout,” in 2066 (40 years). For Picton and Wellington together, they calculate 29,800 in 20 years and 47,100 at 40 years. While the numbers seem very high, it’s just the engineers being  cautious, the equivalent of taking the “worst case scenario.” Actual built capacity can be recalibrated based on actual demand and revised projections as it is phased in. CIMA recommends two phases to full buildout of a Regional WTP.

Claim: The new infrastructure will cost $300 million

So far $42 million has been spent in Wellington on a water tower, water and sewer trunk lines, wastewater pumping station, equalization tank, and all the studies and reports that informed the plans and designs.

A new Wellington WTP large enough to serve the region is estimated at $40 million ($60 million at the high end). A larger intake pipe is another $15 million ($22 million at the high end). CIMA recommends budgeting the estimated capital cost plus 50%.

A 20km watermain to service Picton and Bloomfield from the new plant is estimated at $50 million ($75 million at the high end). Picton will also need a new booster station to pump water to the Macaulay Reservoir. A possible location is the Millennium Trail and Sandy Hook Road intersection.

The grand total for new infrastructure will be between $105 and $157 million. Add the $42 million already spent and the total is somewhere under $200 million. Ancillary parts, such as booster/pumping stations, still need to be factored in.  Sources: Wellington WTP Class EA Environmental Study Report June 2024, and the Picton Master Servicing Plan May 2024.

Some of the required funds are already on the books; $23.6 million was budgeted for the Wellington WTP in 2022 and costed into water rates to 2026. The County has applied to the province’s Housing Enabling Water System Funding for a further $18 million. Any funds received would offset the costs assigned to ratepayers, not developers. As the County has so much development either already underway or close to getting underway, it is expected to receive the funds.

CLAIM: Kaitlin has defaulted on its agreement to pay $6 million in
up-front Development charges

Council must approve the tender for a new pumping station in Wellington before Kaitlin will pay the $6 million under the agreement. The pump station works along with the new pipes to bring water to Kaitlin’s subdivision. Approving the tender triggers the up-front payment. That is spelled out in a legally binding contract. Payment is due in September 2024. The vote to approve the tender is scheduled for the August 27 Council meeting.

CLAIM: The County is paying for growth, not developers

The County has created an area-specific Development Charge regime for Wellington, and Kaitlin has agreed to pay its development charges up front to fund new infrastructure required for its development. Other developers will be required to do so as well.

Sterling Homes has asked to be included in that development charge regime, and to have a share of existing water allocation — but there isn’t any left to allocate. It has been reserved to Kaitlin. To avoid that problem in Picton, the County will not guarantee further water allocation until a draft plan of subdivision is approved and developers are ready to move. Which is why we are seeing a flurry of “plan of subdivision” applications right now.

An area-specific or regional Development Charge study will take account of the plan for a regional water tower in Wellington. Area-specific DCs for Picton will fold in the costs of bringing water from Wellington to Bloomfield/Picton to service new development in Picton and Bloomfield, as well their share of the costs of the new plant— instead of a share of the costs of a new water treatment plant in Picton.

CLAIM: The County should Just Press Pause so it can study things some more and/or wait for a better economic outlook before it starts to build and incur millions in debt

Current Wellington water infrastructure plans were set in motion in 2021. While construction of a new regional WTP in Wellington could start soon, the infrastructure that must be built to service new development in Picton, such as the watermain along the Millenium Trail, will be funded by those developers who need water service allocation as well as by long-term loans. The County is preparing, as it must, for declining infrastructure on one hand, and expected population growth on the other. It has been preparing for these shifts for a decade.

Claim: The lawyer retained by the Wellington Community Association, Andrew Biggart, said he had reviewed the County’s two development agreements with Kaitlin. He reported: “I’ve seen no evidence at all that this municipality has in any way secured a guarantee of repayment.”

The municipality has two Development Charges pre-payment agreements with Kaitlin. They require the developer to post securities equal to 20% of the estimated charge for the entire approved subdivision, or $20.5 million. Kaitlin has put up $4 million in securities. Development charges payable by Kaitlin for their first phase subdivision agreement will come to $6.5 million, due by September 2024.

Claim: Mr. Biggart also said the County will “spend $250 million dollars on new infrastructure without any contribution from developers to carry their share of the costs.”

The County has no plans to build infrastructure for new development without entering into up-front development charges agreements with the long line of developers who need a guaranteed water allocation. There are 8000 homes at the draft plan approval stage of the planning process on the County’s application portal. Development charges can reasonably be expected to pay for at least 75% of the new infrastructure costs under provincial legislation. In Wellington, the Area-Specific DC study established 18 per cent of its new waterworks benefits existing users and 82 per cent is for new growth. An area study for the region will establish the proportions for cost-splitting. The new 20km watermain and booster station benefit Picton and Bloomfield, so will be funded by regional development charges and/or connection charges. Part of the new Regional WTP in Wellington, likewise, benefits Picton and Bloomfield. 

This text is from the Volume 194 No. 34 edition of The Picton Gazette
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