Wellington’s new water main and sanitary sewer trunk lines will soon be under contract. An additional tender for a new sanitary pumping station is also in the works.

The decision to proceed with a tender award to Clearway Construction was approved by a razor-thin margin; the vote was 7-6. Councillors Engelsdorfer, Braney, Harrison, Nieman, Pennell, and Prinzen were opposed.

Approximately $19 million goes toward the last components of a series of waterworks builds initiated in 2021 to support existing and new development in and around the village.

The trunk lines will increase water pressure and flow throughout the village and Wellington on the Lake, support the final connection of the new water tower to existing infrastructure. It will also service new residential and commercial development both north and south of the millennium trail in the village of Wellington.

The new pipes, in other words, are essential to fulfill the conditions of the municipality’s upfront financing agreements with Kaitlin.

The Wellington Community Association was represented by lawyer Andrew Biggart of Ritchie Ketcheson Hart and Biggart, Toronto, whose deposition was a late addition to the Council agenda.

Mr. Biggart, a specialist in land development and in Development Charges agreements, said the up-front financing agreements municipal staff negotiated with Kaitlin Corp. did not provide enough guarantees.

Council, he said, was being “led down a path by your staff where you incur significant front-ending costs with the expectation that they will be recovered in future.” He warned that Council was installing services “for development that may never come.”

He advised the municipality to defer its decision. He also said it was “fear mongering” to suggest the municipality had a legal obligation to Kaitlin. Not proceeding is an option, he said.

Such a decision would, however, mean the return of Kaitlin’s $4 million in securities, and the end of the municipality’s development agreements with the company.

The County’s Chief Administrative Officer, Marcia Wallace, whose innovations in developing up-front financing agreements for the infrastructure underway in Wellington won a Government Finance Officers Association award in 2022, countered that Mr. Biggart was ill-informed. She noted there were factual errors in a December 14 letter he sent to Council detailing his concerns.

Ms. Wallace also noted that she had instructed the County’s lawyer to ensure Mr. Biggart was given correct information and the relevant documents. Mr. Biggart said he had not received any clarifications.

As the ensuing discussion on Council made clear, Wellington needs the water infrastructure it is building. Its water supply is at capacity, with enough allocation room left for just 300 additional connections. That puts the County at odds with the Provincial Policy Statement, which mandates municipal water systems must have 3-5 years’ worth of additional supply available.

Wellington will also, within five or ten years, need a new water treatment plant, as will Picton. The County can either proceed with the plan to get that infrastructure paid for by new development, and new ratepayers, or pay for at least $100 million in required new infrastructure by itself.

The agreements with Kaitlin mean that of the $95.6 million the County is committed to spending on new infrastructure, all but about $20 million will be recoverable in development charges.

Another developer, Sterling Group, has also asked to enter into a pre-payment agreement with the County. It is proposing 253 townhouses in Wellington.

Councillor Phil St. Jean spoke in support. “I am a rate payer. I live in Picton and I represent Picton water and wastewater customers, but more than that, I represent everybody, including Wellington residents,” he said.

“It upsets me when I hear divisive talk about Wellington this and Wellington that. People are not thinking about the effects the decisions taken around this table have on the entire community.”

Mr. St. Jean then considered what would happen without the proposed development.  “We will go backwards. Costs will continue to rise and will soon be out of reach for everyone in this community. It’s not just Wellington but all ratepayers throughout the County that will be on the hook if these DC prepayments agreements do not go through. Zero growth means zero opportunity to recover costs.”

He noted that new infrastructure was eye-wateringly expensive, about $37 million for a new WTP alone.

A number of residents made deputations and comments about the feasibility of development agreements approved in 2021, when market conditions for real estate development were dramatically different.

In response, Councillor John Hirsch moved to ensure a review is undertaken, holding the assumptions in the 2021 Master Plan, the Development Charges Background Study, and Growth Forecast against current conditions, before releasing tenders for new water and wastewater treatment plants. That amendment also passed 7-6.

The municipality has entered into two Development Charges pre-payment agreements with Kaitlin. They required the developer to post securities equal to 20% of the estimated charge for the entire approved subdivision lands. Kaitlin has paid $4 million in securities. Development charges payable by Kaitlin for their first phase subdivision agreement will come to $6.5 million, due by September 2024.

The prepayment allows the municipality to receive funds in time to help pay for infrastructure while it is being built.

Kaitlin is currently awaiting confirmation of contract for the provision of all the required infrastructure: the water tower, the EQ tank, the trunk lines, and the SPS. The tower and tank are almost complete. Once the tender for the trunk mains and SPS have been awarded, subdivision agreements can be executed and the DCs associated with those agreements will be payable. That is expected to be by September 2024.

Speaking for Kaitlin, Devon Daniell reiterated the builder’s desire to get underway with its planned development as soon as possible. “All we are waiting for in order to proceed is these pipes in the ground,” he said. “We cannot wait to get started. We just need that infrastructure.”

Ed Note: the article “All Systems Go,” (Jan. 10) has been amended to show the total amount of development charges payable by Kaitlin Corp for the first phase of homebuilding is $6.5 million and $20.5 million for the entire approved lands. It has also been updated to show subdivision agreements cannot be entered and therefore DCs will not be payable until tenders for both the trunk lines and the sanitary pumping station have been awarded.