Finding fair sewer fees

Greater Victoria municipalities now have to agree on a funding model

Local governments in Greater Victoria will soon begin negotiations to fund the $281 million needed to complete the most expensive capital expenditure project in the region’s history.

The Capital Regional District’s $782-million secondary sewage treatment program is set to begin development at the beginning of 2013 and will end the dumping of raw sewage into the Strait of Juan de Fuca.

To pay for the project, Greater Victoria residents may see an increase in annual property taxes between $200 to $500, or a jump in water utility bills, depending on the jurisdiction. The seven affected municipalities will need to agree on a funding model before work can begin.

Saanich Mayor Frank Leonard said paying for a regional sewage treatment upgrade through property tax increases may be unfair to residents who minimize their wastewater.

“If we go to the property tax model, then the University of Victoria and the two Camosun Colleges wouldn’t pay their share,” Leonard said.

By linking the increased fee to water utilities, properties with septic systems would also be exempt from paying for sewage services they don’t use, Leonard said.

Oak Bay Mayor Nils Jensen said there are two funding issues. “The question will be how to determine how to apportion the maintenance costs, the day-to-day operation and how to apportion the capital costs – both are very complex,” he said.

Oak Bay collects sewage fees based on water consumption, which Jensen asserts is more equitable for property owners. The capital costs however, are much more difficult to apportion. “We’re trying to build a plant that will service the community, not only now, but 20, 30, 40 years in the future. On the horizon is trying to predict what capacity we’ll need. Langford will need more capacity as it expands and Oak Bay will require less capacity as it deals with aging infrastructure and making it more efficient,” he said.

Upgrades to sewer infrastructure have been ongoing in south Oak Bay for several years, but in the Uplands area, where one sewer pipe takes both sewage and grey water to the treatment plant, upgrades will not occur for at least a couple of years.

“One sewer line takes the rainwater and the sewage, so overtime we’ve got to stop that and as we separate it, we’ll have less liquid to treat,” he said.

“As we make it more efficient we’ll need less capacity. We need to find the correct formula for the plant being built.”

On Monday, the federal and provincial governments announced $253 million and $248 million, respectively, for the sewage treatment project, but said any cost overruns will fall to local governments. The province plans to withhold its portion of the funding until the project is near completion in 2018.

CRD spokesman Andy Orr said the municipalities of Victoria, Saanich, Esquimalt, Oak Bay, View Royal, Colwood and Langford will likely agree on a funding model based on how much wastewater they produce and the age of their sewage infrastructure.

“So newer developments, like Langford and Colwood, may well have cheaper costs,” he said.

The sewage treatment project is comprised of three major elements – a wastewater treatment plant at McLoughlin Point in Esquimalt, piping system upgrades and a biosolids energy centre proposed for the Hartland landfill in Saanich.

The biosolids centre will be built as a private-public partnership (P3), which allows private companies to build and operate a facility, but also bear responsibility for any cost overruns.

Esquimalt Mayor Barb Desjardins, who opposes the installation of the wastewater treatment facility at McLoughlin Point, said the CRD should have made the entire project a P3.

“I really have a concern that we’re stepping beyond our bounds as local government. We shouldn’t be doing what private business can do,” she said.

The CRD already manages a wastewater treatment facility on the Saanich Peninsula for Central Saanich, North Saanich and Sidney.

Negotiations between municipalities for a funding model are expected to take place over the coming months and will include public input, Leonard said.

The CRD’s next step will be to hire a project manager and pass a bylaw that allows it to create a commission to oversee the project.

– with files from Laura Lavin