Rate amalgamation vs. development

Question:

If we amalgamate, will all water users have to pay when improvements are made, regardless of geographic area? There is limited ability to add new development in Sauble because the wells are tapped out. How will development in Sauble be accounted for? It seems like most of the infrastructure work mentioned deals with Wiarton. With all the potential development in Sauble, how will the amalgamated rates reflect that?

Answer:

After amalgamation, all water users would be considered part of the same water system. All users would finance the operating and capital needs of the entire system without reference to geography.

In the current 10-year time horizon, you are correct that most of the capital replacement needs are for the oldest infrastructure, which in this case, happens to be located in Wiarton. Beyond the initial ten-year time horizon the comparatively newer infrastructure in Amabel will start appearing for asset replacement. Asset replacement decisions will continue to be based on need and the consequence of failure; not geography.

As for operating costs, after amalgamation, there will be only one system and one group of users. The higher costs to operate the Amabel systems will be combined with the more efficient Wiarton water system and, similarly, all users would pay an equal share of the amalgamated operating costs without reference to geography.

The financing of growth and new development and expansion of the water systems is another matter and something that Council will need to decide. The general premise is that existing users of any water system do not pay for expansion; growth should pay for growth. The new users and developers should pay for the system expansions from which they benefit. At present, there is a formal mechanism in place in Wiarton to collect development charges ("DCs") for water system expansion from developers at the building permit stage. There is no such system in place in Amabel, so if system expansion is requested, the developer would be asked to fund their share of the expansion cost (which would be specific to their particular request) by direct developer agreement.