Developers could get service first in wastewater staging

ERIN – With housing developers willing to put up millions of dollars in advance to fund a wastewater system in Erin, residents of some new homes could end up getting sanitary sewer service before existing residents.

Town council approved a growth management strategy presented by Justine Giancola and Ryan Siersma of Dillon Consulting at its Oct. 15 meeting. 

The report identified two blocks of land in Erin village and one in Hillsburgh that could be developed in a “preferred growth scenario”.

Erin village would get about 62% of the new growth (the equivalent of 2,747 single detached units) and Hillsburgh 38% (1,720 units). Unit equivalents include commercial and employment growth, and there will be more actual homes if there are townhouses or apartments.

Gary Scandlan of Watson and Associates presented wastewater financing options at the meeting and said the three developers in the preferred scenario have offered “front-end” money to kick start the project.

One has suggested they may provide up to $25 million and another has said its upper limit is $20,000 per housing unit, the report says.

With no agreements signed, the report does not identify which developers are offering specific funding.

This front-ending would be an early payment of development charges, normally paid later, and developers are expecting interest on the money.

Solmar Development owns the largest tract of land in the preferred scenario, north of Centre 2000, south of Wellington Road 124, extending east beyond the 10th Line. 

The other block of Erin village land in the scenario, owned by builder Gary Langen, is located on the west side of 8th Line, south of Sideroad 15.

The Hillsburgh land designated as preferred, with multiple owners not identified by the town, is located south of the new Hillsburgh library and north of Sideroad 22.

Not included in the preferred scenario is the Hillsburgh land between Trafalgar Road and 8th Line purchased more than 15 years ago by Manuel Tavares. 

He proposed building 800 homes and much of the planning work was completed, but the project was put on hold when the town was forced to conduct the servicing and settlement master plan (SSMP).

Mayor Allan Alls stressed that while a “preferred” scenario has been revealed, it could change based on the availability of financing.

New housing in Hillsburgh and servicing of existing residents there is contingent on a substantial contribution from developers or senior governments towards a $5.2-million force main to transport waste to a treatment plant east of Erin village. 

Scandlan said existing residents could benefit from other additional amounts that developers may decide to pay, in addition to the minimum development charges.

He also said the town’s use of debt financing could be eased through a private-public partnership, in which a private firm would invest in, and possibly carry out, some functions of the process and make a profit from the eventual revenue. 

Scandlan suggests a phased approach if no external government funding is initially available.

“The first stage may allow for the growth component of the infrastructure (which services development lands) to proceed and be funded by the developing landowners,” he said.

“The second stage (and possibly subsequent stages) could then allow for portions of the existing community to be serviced. This approach would allow the town to manage its debt capacity limit and service existing properties as it is financially feasible.”

Scandlan’s recommended approach calls for four stages of construction of the plant that could be done separately over 20 years. The first stage would cost $23.2 million, with the total reaching $67.2 million by stage four.

The cost of the system per existing household could be about $22,000. That doesn’t include an average of $5,000 to hook up lines from houses to the sewer line in the roadway, with decommissioning of septic systems, plus the ongoing monthly cost of wastewater rates.

Government grants to the town would reduce that $22,000 cost. Alls said council has not yet decided at what point the project would be considered affordable for residents.

In 2014, Scandlan said two-thirds (66.6%) grant coverage on a then-estimated $58.5 million cost (for existing residents) would leave the town some flexibility for other borrowing. It would reduce the capital cost per household to about $9,300, which could be financed over 10 to 15 years at low interest through tax bills.

The total cost of the wastewater project (at full completion by 2041) is estimated at $120 million. About half of that would be paid by developers, for the sewer lines on their land, plus their share of trunk lines and the treatment plant. They would recover it from new home buyers.

Councillor Mike Robins was concerned about being able to attract new residents.

Mayor Alls said, “I think the problem will be the opposite – how do we hold them back?”

Dillon Consulting conducted an engagement strategy, with a survey that had 284 respondents. About 45% were happy with the prospect of growth, 26% unhappy and the rest neutral. 

The preferred lands were chosen based on a wide range of criteria, including size, location and efficient addition to existing development. 

The wastewater servicing and housing development will not happen for several years but will generally progress from south to north, starting at the treatment plant.

“Developers have the opportunity to accelerate the servicing construction through front-ending the costs and recovering funds through future development agreements,” said the Dillon report.

In a Sept. 23 letter to Erin council, Solmar president Benny Marotta said his firm participated in discussions with the town’s consultants and wants to develop a partnership with Erin based on mutual goals.

“We have indicated our willingness to participate financially and assist in bringing a wastewater solution to Erin,” Marotta said.

“In the interest of working collaboratively with the town, Solmar chose not to appeal the town’s new development charges bylaw, despite the objections of our economic consultants and legal team.”

The province requires that 20 per cent of the overall residential growth be in-fill housing, also known as intensification, on urban lands that have already been developed. The report says this should add up to 457 housing units. 

Alls said there is a high demand in the market for this type of growth.

For Erin village, intensification can include the Erin Heights Golf Course land owned by Jim Holmes, located on 8th Line just across the road from the Langen land.

The main trunk line would come south from central Hillsburgh on Trafalgar Road and continue on the Elora-Cataract Trailway. 

Councillors discussed the possibility of including a water line in the same trench, so the water supply in Hillsburgh could help service Erin village.

The main line would continue south on Main Street in Erin village, turn left onto Spring Street, and then right onto Daniel Street. It would continue through the former Mundell lumber yard, then rejoin Main Street south of the shopping district. It would go left along Wellington Road 52 to the treatment plant near 10th Line.

As previously announced, certain areas with relatively new private septic systems would not get wastewater service. These include the Delarmbro Drive area, Credit River Road and Pine Ridge Road in Erin village, and Upper Canada Drive in Hillsburgh.