Presentation given by Andy Boyd on behalf of the Township of - PDF document

Presentation given by Andy Boyd on behalf of the Township of Madawaska Valley Citizens Action Committee at the Regular Council Meeting on January 7, 2013. WATER AND WASTE WATER TAXATION On behalf of myself and the community I would like to thank Mayor Shulist for his published letter “ TRANSPARENCY ” and any member of Council who supported it! On a personal note Mayor Shulist, you will have my vote in the next election. You asked to hear from the public on this water issue, well we are here!!! Now let me address Council as a whole. I am here today representing hundreds of people from Madawaska Valley over concerns created by Item 5.4 in the report from the December 12 th Water, Wastewater Waste Management Meeting. There has been such a void of communication that the public has great concerns over this issue, there are negative perceptions because of this. Let me be clear from the start, this is NOT a rural verses city issue. We are in this together. If you are in favour of spreading the costs and future costs of the Water and Wastewater Systems in Barry ’ s Bay out into the General Tax Base, then we are strongly against it . If there are funding or hardship issues, we want to see users assisted through Provincial Grants, or possibly the $750,000 of the 4.2 million dollars held in reserve funding dedicated to water / waste issues. You are attacking one of the By-Laws that is a cornerstone of the amalgamation of Madawaska Valley Township. Barry ’ s Bay only represents approximately 18% of the Madawaska Valley Township tax base. We contribute strongly from all areas to its infrastructure. Let ’ s step back and view this issue and its handling for a moment. I myself, and this community, believe you to be good people, who were elected, or appointed to represent the needs and wishes of the people! We do appreciate that sometimes issues have their own timing, but this has such impact that it has created a very negative perception that it was going quietly through during the Holiday Season. We know that you are well intentioned! As you have noticed by the turnout tonight, the people do not support this tax issue! You are here to represent them. Further, our community is strongly funded by summer residents who are not here! 75% of the Residential Tax Revenue comes from rural lakefront property owners. As an example I pay approximately $5,000 per year in tax for my 1,500 square foot home on the water. A home the

same size in town pays less that half the taxes I do and gets full services! So I and many other rural residents already strongly support the infrastructure of this Township in exchange for very little service! Our present method of communication is very poor. Are these summer people to arrive next summer to discover they are now paying for more services they do not use? Ok lets look at water costs. IN TOWN AVERAGE $100.00- $150.00 PER MONTH RURAL COSTS OVER 20 YEARS DRILLED WELL $10,000 SEPTIC SYSTEM $10,000 = $20,000 REPAIR $2,000 PUMP OUTS $1,000 POWER at $25.00 $6,000 PER MONTH $29,000 = $120.00 PERSENT DAY $39,000 = $162.00 We do sympathize with the costs of the 660 who are on the system but as you can see we pay the same or more in rural cost for our systems. Plus we are at far more risk of expensive repair and replacement cost. Some of the rural ratepayers are some of our most financially challenged families. Should they pay for services they don ’ t use? Can they? There has obviously been a breakdown in communication between the general public and the Water and Wastewater Committee. I will now read a letter from former Councillor Kim Love that covers some history on this issue: The Water and Waste Water system in Barry’s Bay was built in 1974 for approximately $3.3 million. After Federal and Provincial government funding of 90% of the cost, the users of these systems owed $330,000. In 2003, the old debt remaining was estimated to be $337,850 ($215,000 for the Water Plant, and $122,850 for the Sewage Plant) 1 . For 29 years the water and waste water rates paid by these users were insufficient to pay off the principle owing on this debt. This old debt had to be factored into the new schedule of rates and fees set in 2003, and it still raises the total price that users pay today. After Walkerton, the Barry’s Bay Water Plant received OSTAR Funding of over $1.6 million to bring the plant into compliance with the Drinking Water Protection 1 See Full Cost Water and Wastewater Rate Recommendations to the Township of Madawaska Valley by Sharratt Water Management Ltd.

Regulation (O. Reg. 459/00). In the Township of Mada waska Valley’s OSTAR Application, the Financial Plan states: “The municipality’s share of cost will be recovered through a user fee, as part of the water rates for all residences that are connected and to be connected to the municipal water system. The user fee includes an allowance to create a reserve for future upgrading requirements” 2 . The Water Plant total eligible cost of $2,485,030 less OSTAR funding of $1,656,769 leaves $828,261 plus any cost overrun to be paid by the users of the system 3 . Former Council members sitting at the time of completion have publicly stated that the total cost to users for upgrading this plant was approximately $1 million. The cost of renovating the Barry’s Bay Waste Water Plant was estimated at $7.5 million. Federal and Provincial funding of $2.66 million was to be matched by the users contribution of $1.33 million under the funding agreement. A further $5 million in infrastructure funding given to the municipality with “no strings attached” has been commandeered by Council solely for these projects. These 660 users (households and businesses) have therefore received over $9.3 million in government grants, averaging $14,090 per user to cover recent capital expenditures needed for these systems. In return, the average capital cost that should be charged to users is only $3,530 ($2.33 million ÷ 660). By shifting capital costs onto the General Taxation Base, this Council is reneging on funding agreements the Township of Madawaska Valley entered into with both the Federal and Provincial governments. Since these grants are funded by our Federal and Provincial tax dollars (income tax, user fees, etc.), we the taxpayer have already paid the lion’s share of all capital expenditures for these systems to date. The December 12 th Water, Wastewater Waste Management Report recommends removing $235,214 in capital and operating expenditures from the annual budgets for water and waste water, and adding them to the General Taxation Base. This will shift responsibility for these costs away from users of these systems and onto ratepayers. This violates the user pay principle. Rural ratepayers already pay their own capital expenditures ($10,000 and up), operating expenses, and replacement costs. The users of these systems should be happy to pay their own capital expenditures (averaging $3,530), operating expenses, and replacement costs. The Amalgamation agreement negotiated to create the Township of Madawaska Valley included the user pay principle for water and waste water services. This agreement was unanimously approved by the three former Councils of the Townships of Sherwood, Jones & Burns, Radcliffe Township, and the Village of Barry’s Bay. That Council for the Village of Barry’s Bay included former Reeve Bob Kulas, Councillor Shaun O’Reilly, and Councillor Sylvie Yantha. Historically the five members of Council also make up all the five members of the Committees. Once this was probably necessary. But now it must be challenging for the five of you to meet as a committee and come up with recommendations that you then vote on as Council. This structure may have left you too isolated from your community in your decisions! At the first meeting your new C.A.O. Bryan Brown attended, he clearly informed you that your committee structure was improper. He advised you that only 2 See Township of Madawaska Valley Request for Additional Funding for Waterwarks Improvement – OSTAR Infrastructure Program 3 See Ontario Small Town and Rural Development (OSTAR) Infrastructure Initiative – Round 1 – Funding Agreement for Infrastructure Projects