The projected cost to move this town’s water department could mean significant hardship to local water users.
Even so, Erin Mayor Lou Maieron is still trying to come up with options to allow a public re-use centre to set up shop in the former Erin Hydro building currently used by the Erin water department.
Discussion on Oct. 1 continued previous talks stemming from a proposal for a re-use centre that was lauded by Maieron.
Initially the mayor suggested staff consider vacating the former hydro building on Shamrock Road (near the Wellington Road 124 intersection in the north end of town) to provide space for the volunteer re-use venture.
Then, over the past few months, Maieron suggested town water superintendent Frank Smedley provide council with estimates and options as to how much it would cost to share space within the town roads department building.
Additionally, the mayor asked how the water reserves could be factored in to offset the cost of such a move.
On Oct. 1, Smedley came back to council with his report.
He stated that “after further consultation with the road superintendent we have come to the conclusion that attempting to house the water department on the roads department property does not fit into the long-term plan for providing efficient road-related operations.”
Smedley explained, “all of the buildings on the roads department property are being used for roads-related uses. In the future sand and salt storage will have to be increased.”
He added that at some point, both the roads shop and sand dome will need to be replaced.
Smedley suggested that due to additional development requirements, it is likely that these replacement structures will have to be increased in size.
He said that without adequate roads yard property available, the only option would be to construct a new building on the section of property between the roads shop and the municipal offices.
He estimated that cost could be $1.35 million. To replace the Erin water shop on an empty industrial lot the cost would be that amount, plus the cost of a serviced industrial lot in Erin village, which would be approximately $600,000.
He said a 12.4-acre graded, gravelled lot with fencing currently offered for sale in Erin for $628,000 was used to establish property value.
As such, Smedley estimated the total cost to build a new location in Erin would be about $1.98 million.
As for the idea of removing $200,000 from water reserves, Smedley said that would have a number of impacts.
Smedley said water reserves are intended to replace aging infrastructure and were established as part of the 2010 Water Rate Study and subsequent Water Financial Plan that was required by government regulations.
He explained that reducing the reserves by $200,000 for something that is not in the study and plan would require the money being replaced by some other means.
However, as a pay-per-use, stand alone department, Smedley said the only avenue to replace existing reserves is to increase water rates or implement a levy on the water bill. Splitting up the $200,000 over the existing 1,300 water accounts would add $153 to each property’s water costs.
In addition, if the water department were to build a new location at an estimated $1.98 million, splitting this cost over the existing 1,300 water accounts would add $1,523 to each property’s water costs.
However, Maieron did not appear ready to give up the fight to have at least part of the building transformed into a community re-use centre.
After Smedley’s report, the mayor’s argument shifted from use of the entire former hydro building, to the potential of only using part of the building, which according to Maieron contains both office space and three garage bays utilized by the water department since amalgamation.
He argued that if the water department is a stand-alone function, it should be paying rent and utilities for the building.
Maieron also questioned why the department did not receive any of the proceeds when the former Erin village municipal building was sold.
He then asked if there was a way to backtrack to financially compensate the department for its share of the sale and to come up with a means to bill the department for use of the hydro building based on market values of the time – and including compound interest in both sets of calculations – to determine if one party owes the other any back payment.
“Perhaps my suggestion does not cover all the facets or intricacies of such a long-term situation but I think it provides a starting point on how to address this convoluted matter,” said Maieron.
He then suggested, “Perhaps the best of both worlds can be achieved with one or two of the bays being made available for rental, while leaving the remaining space for the water department as it sorts out its situation.”
Maieron said that “sometimes in private business, you can’t have the best of facilities.” He suggested there may be outdoor storage solutions which may apply to certain equipment.
Councillor Barb Tocher said the previous resolution passed by council “was very clear.”
It asked for the costs to relocate the water department to a new location and the impact it would have financially. Tocher stressed Smedley was not requested to answer the additional suggestions Maieron brought forward.
Maieron said, “even if the additional items were not recorded in the minutes, they did come up. Council needs to decide whether the department is stand-alone or not.”
Councillor Josie Wintersinger said she did look at the roads building suggested for relocation. She then expressed doubt it would pass health and safety standards to operate as a water department. Currently, the building is used for storage.
Maieron contended the cost to upgrade that building would be less than building a new one.
Wintersinger wasn’t certain she could agree.
“[The roads department] is currently using that space and there is very little room to move around when the salt and sand trucks get in,” she said.
Councillor Brennan said while he understood the principal behind the idea of the water department being self supporting, he wanted to know how other municipalities of similar size operate.
Smedley said each municipality has evolved differently, noting, “I don’t see a cookie-cutter type of approach.”
Maieron agreed he did not have all the facts and figures, but believed financial reconciliation was in order. He added the office portion of the hydro building has been vacant for the past six months.
Maieron said the community re-use centre group is interested in the building. While the group has in-principle support from Erin council and the county, it has no funding sources yet.
“I wonder if the best solution might be to offer one or two of the bays,” Maieron said again.
Councillor Tocher argued the water department is not likely to get smaller – “it will only get larger once all the urban areas are connected to water.” She suggested council consider deeming 1 Shamrock Road in its entirety – property and building – as a water department asset.
As to the idea of going back and looking at past costs, Brennan said, “when the water department was set up on these premises, it was never with the intent that it would be paying rent to the town.”
He said with any other bylaw, existing uses would be grandfathered in. He added it would be a complex issue to sort out the financial aspects.
“Going forward – that’s a different story. If that is how other municipalities are doing, it may be a viable concept moving forward. But to apply it back over the past 12 years, I can’t see that.”
Maieron said he did not believe rural residents should be subsidizing water costs.
Tocher added the Erin Hydro building was paid for originally by the ratepayers of Erin village – who were also the water users. “In effect, the water users of the village of Erin paid for the building to begin with.”
Smedley said there are a lot of issues which need to be considered. One thing which stood out to him was the tanker-shuttle system used by the Erin Fire Department. That water comes from the Erin water systems – whether or not the call is to an urban or rural location.
He added when the department responds to rural fires “they are using our hydrants to fill their trucks.”
