Saturday, May 30, 2009

Struggles muddy upgrade waters

Don Plant 2009-05-30 Kelowna Daily Courier:
Power struggles over water are flaring up in Kelowna and Vernon, and taxpayers could get soaked by higher distribution costs. The conflict over whether to amalgamate four irrigation districts within Kelowna city limits and the push by the City of Vernon to acquire more control over the water utility it shares with neighbouring communities will change the ways water is delivered in the Okanagan. Driving the urgency is the fact more people are moving each year to a valley that has the lowest per-capita availability of freshwater in the country, according to Statistics Canada. New drinking-water requirements demanded by Interior Health have made the stakes higher. IH has set rigorous standards for water quality so people don‘t get sick. To comply, Valley water utilities must spend hundreds of millions of dollars to build treatment systems and install new distribution lines. Everyone‘s goal is to reduce the number of boil-water notices and water-quality advisories that utilities issue every time the tap water gets cloudy. How to get there is where leaders disagree.

In Kelowna, about 55,000 people receive their water from four independent districts not governed by city hall. Those districts supply 72 per cent of the city‘s total water supply to ratepayers and almost all its farmland. They‘re public utilities with elected boards that fall under the province‘s jurisdiction. To improve their water quality, the irrigation districts for Glenmore-Ellison, Black Mountain and Southeast Kelowna are asking the province and Ottawa for two-thirds of the $57 million they need to build a new reservoir, pump station, disinfection facilities and 80 kilometres of pipeline. Managers asked city council in March to support their lobby efforts, but the discussion soon veered to a debate over whether the city should take over the districts as one big utility. Councillors eventually proposed a joint study on whether it‘s feasible to fold the irrigation districts into one large utility operated by the city. District managers are now frustrated and confused about their future. Bob Hrasko, administrator for Black Mountain Irrigation District, says discussions over amalgamating with Kelowna pushes them four steps backward. “The public doesn‘t want a navel-gazing exercise on governance,” Hrasko said. “We need a support letter from council and a commitment that they‘ll leave us intact as organizations. “Why not get our projects and protection in place for people first? Why does governance have to happen first?”

The city does support the districts‘ applications for infrastructure funding – to an extent. Council wants them to make short-term improvements so they no longer have to issue boil-water advisories. However, if the districts need the city‘s support for anything more, they must participate in the governance study, said Coun. Robert Hobson. The reason, he said, is that the city and water districts are competing for the same grants from the Building Canada program – Ottawa‘s new $33-billion infrastructure fund, a major source for Kelowna‘s capital projects. “If . . . the utilities seek funds from the same pots of funding the city is applying for (to build) large projects, you have to address governance issues,” Hobson said. “We asked them to agree to do that as a condition for us to sign off on their applications for additional funding.”
The study may find the status quo works just fine, he said. Kelowna is unusual, however, in that it has several water purveyors servicing one large urban population. Irrigation districts created decades ago to supply farmers with water are now largely overrun by residential neighbourhoods. “If a system is no longer primarily an agricultural system, maybe it should be managed by an entity that also manages land use and subdivisions, since most of the demand for water comes from changes in land use and subdivisions,” Hobson said.

To upgrade their water quality, irrigation districts must split their transmission lines so domestic users get treated, more expensive tap water and farmers get untreated water for irrigation. The advantage of keeping the districts independent is that its directors focus solely on providing water to their customers at affordable rates, said Hrasko. “Black Mountain Irrigation has a policy to get someone out to the house in 15 minutes if there‘s a serious problem. Could the City of Kelowna match that level of service?” Hrasko said. Joining all water systems under one utility could be expensive. Hrasko estimates the transmission costs could reach tens of millions of dollars. How big the bills are for ratepayers depends on how efficient the governance structure is. “It depends on who runs it, how much they care about the costs and how good they are at their jobs,” Hrasko said. The districts are now designing their own improvements. They could circumvent city council and lobby for the infrastructure money themselves. However, B.C. Community Development Minister Kevin Krueger would be more sympathetic if they had the city‘s backing, Hrasko said.

The dynamics in the North Okanagan are somewhat similar. Vernon is trying to break up with its partners and take over control of the region‘s water utility. If successful, the cost of water would likely rise for everyone else. Vernon council complains its three partners – Coldstream and Electoral Areas B and C – have the same number of votes as the city when making decisions about Greater Vernon Water Services. If one of the partners refuses to budget money for works needed in Vernon, the works don‘t get done. Mayor Wayne Lippert said the city provides 70 per cent of the funding for GVWS projects and subsidizes water that supplies the agricultural lands. He knows rural ratepayers would be on the hook for higher water costs if the city pulls out.

The city wants its partners to contribute more money to offset water-distribution costs. However, the system of “fiefdoms” makes the partnership inequitable, Lippert said. “We want flexibility to determine how we service our customers. The Electoral B representative wants to look after his customers the way he sees fit. Same with Electoral C and Coldstream.” One solution is to have everyone share the bulk supply of water infrastructure – the treatment plants and main trunk lines – and have each partner look after its own distribution. Lippert‘s answer is to have the City of Vernon take over the water utility without the political boundaries. “It would knock down the political walls of those fiefdoms because the city would have direction on it. It would give each of the partners a voice, but the ultimate ownership is through the City of Vernon,” he said.

The rural districts have fewer customers and greater areas to service. When residential users dilute the agricultural community‘s influence over water, farmers could see their prices rise. Worse, they could lose more during water shortages. “Restrictions due to water shortages cut back on their income. There‘s a need in the agricultural community to keep a close watch on a water utility that a city council doesn‘t provide,” said Al Cotsworth, manager of Greater Vernon Water. The Vernon system is managed through the North Okanagan Regional District – a big difference from the Kelowna utilities.

While Vernon must decide how to dance with its neighbouring municipalities, Kelowna is trying to work out how to provide water to its own family. “We‘re looking at providing water within a single municipality,” said Hobson. The Kelowna study is expected to take a few months.

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