Opposition is mounting to the Capital Regional District’s proposed $2 billion water infrastructure plan, with a new report saying it will “expose” residents to soaring water charges due to “expected cost overruns.”
Colwood Coun. Ian Ward has been outspoken about the CRD not proving its case that water usage rates are increasing.
“This plan operates on the assumption that water usage will increase at a linear rate with regional growth,” Ward told Black Press Media previously.
Now a coalition of groups has released a new study by engineer Jonathan Huggett saying the same thing. The report was commissioned by four housing industry associations.
Huggett said in a news release that the CRD’s Regional Water Supply Master Plan is missing technical and financial due diligence, and will be “exposing residents to a potential 500%+ increase in water charges with expected cost overruns and adding thousands of dollars to the price of every new home.”
Huggett says the CRD is proposing a $2 billion upgrade to the water supply system, including a $1 billion filtration plant based on flawed projections and other questionable data. He advises that the plan fails to implement sound fiscal management practices and does not address soaring capital costs, particularly since the pandemic, risking significant project cost overruns.
“My report outlines a wide range of concerns, including flawed water demand and population projections, inadequate watershed management and water quality data, and poor financial risk management strategies,” said Huggett, in a statement.
The groups behind the report are the Urban Development Institute - Capital Region, Victoria Residential Builders Association, West Shore Developers Association and Sooke Builders Association. The report says these four groups are “alarmed” by the CRD’s plan.
“The plan will add additional Development Cost Charges of $9,044 per new single-family home, and $7,914 for each ‘missing-middle housing’ townhouse and duplex,” said a news release. “For a 50-unit multi-family building, these new charges alone would add over $250,000 to the build.”
But the CRD disagrees about the plan having such a dramatic impact on DCCs.
“The CRD does not expect the recent bill to affect the DCC rates in the short-term; however the DCC program is scheduled to be reviewed every five years and will include a review of the growth projections, the CRD said in a recent statement to Black Press Media.
The CRD said that demand for water will be increasing as communities grow.
“Without investments in the water system to meet the demand caused by growth, the demand for water will eventually exceed supply,” said the CRD statement. “The CRD is proactively planning to be prepared to meet the region’s long-term water supply needs. Water rates, grants and DCCs are the primary tools available to the Regional Water Supply Service to fund new projects. As the Regional Water Supply Service provides a substantial benefit to both existing developments and new users, many of its capital projects are eligible for inclusion in a DCC program under the Local Government Act (LGA).
“The LGA provides DCCs as a tool in recognition that there is an inherent responsibility on developers to pay their fair share of the infrastructure costs required to service their developments. This is referenced in the DCC Best Practices Guide as the ‘Benefiter Pays’ principle whereby ‘Infrastructure costs should be paid by those who will use and benefit from the installation of such systems.’ DCCs as a cost-sharing tool are important to equitably apportion the benefit and costs of infrastructure in a transparent and fair manner that does not place a significant cost burden on water rate payers. By not having DCCs in place for the Regional Water Supply Service the infrastructure costs necessary to support new growth must be paid for by CRD residents through higher water bills.”
The report’s claims are backed by retired Metchosin mayor John Ranns, who was also a CRD director and would not have voted in favour of this if he was still on the board. (The full report can be found here.)
“Any master plan is a broad look into the future and is never intended to be implemented as presented on day one, Ranns said, in a statement. “This plan contains a number of practical future projects, but the filtration plant option makes no sense whatsoever. Our gravity-fed water supply system is the envy of North America and eliminating it to accommodate unneeded filtration will add huge operational costs and complexities. If this proceeds, the only winners will be the engineering companies and the losers, as usual, will be our beleaguered residents.”
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The CRD is also disputing that it hasn’t done its due diligence when it comes to the cost estimate for the water plan.
“The 2022 Master Plan recommends 21 major projects be implemented over the next 30 years that are deemed critical to improve the resiliency of the Regional Water Supply Treatment and Transmission System and will be necessary in the longer term to provide enough drinking water to support the growing region,” said a CRD statement.
“Cost estimates were completed by subject matter experts using Class D (concept level) cost estimates and included allowances for contingencies and inflation. In total, the recommended projects are valued at $1.53 billion in 2022 dollars and $2.05 billion in inflated dollars to 2050 to account for future design and construction costs. The treatment and design requirements will be further refined based on pilot studies and further fieldwork. After the refinement of the design in the preliminary design phase, cost estimates will be updated.”
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