I opened the Town’s recently issued water report prepared by Watson & Associates Economists Ltd. to review it and take notes. It all started reasonably and then I hit page 2.1. (The report can be downloaded from the Town’s website through this link.) That’s where the WTF reaction arose.
The report states that there are currently 2,346 customers for water and 2,273 for wastewater services. Okay, that seems reasonable, the consultants have the Town’s account numbers. The report goes on to assume there will be a total of 30 new customers (three new accounts per year) for water and wastewater services over the period 2020 to 2030. I take this to mean from the beginning of 2020 to the end of 2029, a ten-year period. This is an increase of 1.3% over ten years. Water consumption is expected to increase by 0.7%.
How do you assume only 30 total new water customers when house conversions to multiple units are ongoing, the Lighthouse development will be coming on line, as will Thunder Creek? These two developments will create dozens of new accounts. There is also the Acorn Ridge development on Louisa Street with potentially hundreds of new accounts that is on the back burner for now but is more than likely to arrive in the next decade given the demand for housing in the Town and the willingness of people to pay whatever it costs to get out of the Big Smoke and retain the luxury of high speed internet without worrying about wells and septic systems.
What about the new Recreation Centre? Will they be filling the pool with water pumped directly out of the Big Sound?
The report states that it is presenting a ‘conservative’ forecast. There is ‘conservative’ and there is ‘sandbagging’. Town staff are pretty experienced at sandbagging. I see it regularly in the annual budgets and largely ignore it as it is not too egregious and there is no ulterior motive. If you put a budget item in at a higher cost than you actually expect to pay you are a hero for the savings. At the same time these ‘extra’ funds are now available to pay for other items that Council was not willing to consider because of the expense, or the savings can cover other items where there was an error made by underestimating a cost. Sandbagging is not hard to identify if you know what you are looking for.
It seems that in the case of the Water Report the sandbagging is being done to rationalize higher water rates. The largest part of water and wastewater costs are not related to the cost of purifying and pumping water or processing wastewater before discharge, it is related to the cost of building and maintaining the supporting infrastructure. This includes things like upgrading and servicing pumping stations, replacing pipe, and installing new pipe. With no growth in customers and water use there is no need for additional water related infrastructure; you take a maintain and upgrade only when necessary approach.
I have put off reading the cost and revenue estimates provided in the report pending an answer from the Town about the growth rate presented in the report. Once I have an explanation, I will take another look at the report and provide you with an overview of the report, the conclusions, and the implications. That won’t be until the ‘holiday week’ is over and Staff is available.
Do we need an economic development officer to get a total of 1% growth over ten years? Do we need a fulltime Chief Building Officer if there is no significant construction expected? What about a Planner?
Come on folks, was Staff unable to identify the discrepancy or did they actually request it? The Town would have seen and commented on the report before it was issued. Consultants know what they are doing. Forecasting a smaller than realistic growth in water accounts has the net effect of raising the rates the Town charges each of us for water and wastewater. It’s only a few percent points difference but it is meaningful. Screwing around with your assumptions to get the number you want is deceitful and ruins your credibility. Keep your assumptions realistic and be direct with the cost that will be required. Don’t sandbag it. Or if you do want to really lowball the numbers then state that in the assumptions. Don’t call it ‘conservative’.
Oh, in case you were wondering, WTF means What the Forecast.