ERIN – Erin council approved a water financial report at a special meeting on May 28 – a meeting called after councillors sent the report back to staff for more information on May 19.
Watson and Associates Economists Ltd. prepared the Water Financial Report and presented it to council at its May 19 meeting.
The financial report, prepared by Watson and Associates Economists Ltd., is one of five requirements the town must submit to the province to retain its license to provide municipal water services.
The report had to be approved by council and submitted to the province by May 31.
Gary Scandlan, Watson and Associates’ municipal finance division director, presented the report to council on May 19 via telephone.
Council and senior staff were in chambers and the meeting was live-streamed.
Due to technical difficulties, Scandlan’s presentation couldn’t be heard by members of the public who had tuned in to the meeting, and Scandlan wasn’t able to hear or respond to questions from council after his presentation.
The special council meeting on May 28 was called so Scandlan could answer questions raised by councillor Michael Robins on May 19.
Robins had asked if the Hillsburgh watermain replacement project – at a $3 million price tag – was included in the list of capital projects in the report.
“This is included in the capital listing,” Scanlan said, adding the town has applied for a grant for the project and doesn’t know yet if it will be approved.
“If it is approved, we will re-look at the capital program,” said Scanlan.
“If it’s not approved, that will affect the timing (of construction.) It could be considered in next year’s capital plan.”
“We approved the $3 million cost,” countered Robins. “If we don’t get the grants, we still have to do the project.”
Robins expressed his concern that according to the figures in the document, if $3 million is paid for the Hillsburgh project, “that leaves $600,000 for the rest of the system, which is a little understated.”
Scandlan said the financial report is a “living document” and the province recognizes that situations may change.
“There will always be issues that will change year over year,” he said. “It is subject to variation.”
Robins’ second concern on May 19 was that the financial report did not support the growth plan council has approved for the Town of Erin, specifically its decision to move forward on design of a wastewater treatment plant (WWTP).
Growth is very much tied to having wastewater infrastructure and much of the cost of the WWTP is to be paid for through development charges, so they must happen in tandem.
Scandlan explained the water financial report was based on the 2019 water rate study council approved in December 2019, but for every growth scenario, lower levels of growth are assumed in the first three years.
“In year 4 you will see robust levels of growth,” he said. Once again, as a living document, the numbers can be adjusted to reflect actual growth when and as it occurs, Scanlan added.
Robins wasn’t satisfied: “This document – if we indicate we believe in a low-growth scenario, that’s not in agreement with our plan. It’s not reflective of what we decide and where we want to go.”
Nick Colucci, director of infrastructure, reminded council the water rate study was completed at the direction of council, as was the financial report.
“If this report has higher growth, we would have to change the water rate study,” Colucci said.
Robins’ final concern was over cash flow projections, which are forecast to drop from $10 million to $4.5 million by year-end – some of that because of taxpayers’ inability to pay taxes during the COVID-19 pandemic.
“Regardless of whether it’s taxes or water bills, they will be collected,” said Ursula D’Angello, director of finance. “This year or the following year, the town does collect.”
Robins summed up his thoughts before the final vote.
“I struggle with this disparity on the asset management plan,” he said.
“At some point we need consistency between the various reports. At some point we have to come up with a view to our future that’s reflected in these reports.”
Council ultimately approved the report, with Robins the only one opposed.