Union water system in need of funds
Changes would ease ‘rate shock’
The Union Water Supply System, which supplies drinking water to 65,000 county residents, needs $10 million to $15 million worth of upgrades, but can’t apply for grants or borrow money on its own.
To avoid a sudden wholesale rate hike, the system, which is owned by Leamington, Kingsville, Essex and Lakeshore, needs to get out of its legal limbo and become a municipal service corporation, general manager Rodney Bouchard says.
“It’s a benefit to the municipalities and their residents because if we do this then we can access the debt market and we can basically access grants, then we don’t have to increase water rates significantly to fund our capital programs,” Bouchard said Tuesday. “It would avoid rate shock.” To get a loan, the system needs all four municipalities to agree and each municipality carries a portion of the debt based on water use. Leamington holds the most debt because it uses about half of the water even though its residents may not benefit from every upgrade, he said. The system misses out on grants because it can’t apply on its own, Bouchard said. “We have no legal standing. We’re not a corporation. We’re not a department. We’re not anything basically.”
The system, which treats water from Lake Erie at its Ruthven plant, got its start in 1959 as an area water system. It was owned and operated by the province until 2001 when it was transferred to the four municipalities. The ownership and the voting rights on the advisory board are based on how much water each municipality uses. The water is sold at a wholesale rate to the municipalities, which set their own water rates. The system needs to change its clarification process next year because of algal blooms at a cost of about $4 million to $5 million, Bouchard said. Adding ultraviolet light treatment to the water in the next three to five years could cost $5 million to $7 million, he said. The water main to Cottam needs to be replaced, but it presents a problem because it benefits Kingsville, Essex and Lakeshore, but not Leamington, which would bear most of the debt, he said. Becoming a municipal service corporation is not privatization and would not mean changes to the board, Bouchard said. Kingsville council approved the new structure and Essex referred it to staff. Bouchard will meet next week with Leamington and Lakeshore councils.
We have no legal standing. We’re not a corporation. We’re not a department. We’re not anything basically.