Local Issues: Five or One – Mea Culpa, Me Paenitet

“Mea culpa, me paenitet”, which is Latin for “my fault, I am sorry”.  In my previous post I asserted that the amalgamation of the water utilities was put forward as an issue during the last municipal election, as a strategic political move designed to gain votes.  I received a reply from the city pointing out that I was wrong.  I am grateful for having this error pointed out, and do not want my error to distract from what I believe are some serious questions that should be addressed before the proposal suggested by the value planning exercise is implemented.  I was wrong, and I apologize.

I did spend some time looking into the events that did transpire.  Here is something of a timeline.

2006 – Provincial policy statement on improvement districts
Improvement districts are a legacy of the early development of the province. Their services are best delivered by municipalities or regional districts, and the province favours the dissolution of improvement districts and the assumption of their services by municipalities or regional districts. To that end, it will continue to provide more favourable financial opportunities only to municipalities and regional districts.  This has been the evolving direction of provincial policy since regional districts were first created decades earlier.

2010-01-12 – Minister’s letter (referenced in KIWSP)
In response to lobbying from the four utilities other than the city, the minister issues a letter setting out conditions under which they would be flexible with respect to funding in relation to the need for amalgamation.  These were:

  • Best-Lowest Cost solutions,
  • Achievement of Public Health Outcomes,
  • Agricultural Interests Maintained.

2010-09-15 – Memorandum of understanding between five utilities (referenced in KIWSP)
The five utilities sign a memorandum of understanding that sets out the terms agreed to in order to move forward and develop a plan consistent with the requirements of the ministry.

2012-09-21 – Kelowna integrated water supply plan
Plan developed under terms of agreement set out in memorandum of understanding delivered.

2012-10-25 – SEKID ratepayers reject borrowing for system upgrades
The voters in the South East Kelowna Irrigation District (SEKID) rejected a proposal to borrow money so that system upgrades could be made to meet Interior Health requirements. The board chair states that “… the community is in favour of the project but is not willing to move forward without government funding assistance.” SEKID is therefore unable to comply with Interior Health requirements on their operating permit.

2012-12-09 – Memorandum of understanding to develop implementation plan
The five utilities sign a memorandum of understanding under which they will develop an implementation plan for the KIWSP.  Under the MOU, the parties agree to allocate scare provincial grant money to the highest priority projects.  Given that such money was not available to the irrigation districts directly, all such money would have to pass through the city.  This was clearly described to city council when their approval was sought for the city to sign on to the MOU (Report to Council, 2012-11-08).

2013-03-13 – Kelowna integrated water supply plan – implementation plan
All five water utilities sign onto an implementation plan for the previously developed integration plan.  The implementation plan is approved by the province, and would be used to prioritize capital expenditures and financing of those expenditures across the five utilities (see also RWW).

2015-04 – SEKID water quality improvement program
SEKID develops a plan to bring their system into compliance with Interior Health requirements without borrowing money.  Without grant funding, which would have had to come through the city, SEKID voters would face a significant rate increase.  At the conclusion of this project, the SEKID system would not need major capital upgrades for some time.  SEKID is the last of the three irrigation districts to move forward with implementing plans to upgrade their water to provincial standards without receiving funding support from the province through the city.

2015-04-12 – Kelowna citizen survey
Results of a survey of Kelowna residents conducted by Ipsos Ried are released.  The results are based on 301 telephone interviews, with a reported accuracy of plus or minus 5.7%, nineteen times out of twenty.  The top priority identified by the respondents when they are asked to compare a list of priorities is drinking water, which was the chosen priority six percent more often than the next most frequent winner, encouraging a diversity of housing at different price points.  The survey did not ask about the preferred organization for the delivery of services like water.

2015-09 – Kelowna council priorities
Based at least partly on the results of the citizen survey, city council singles out drinking water as its top priority.  Then begins messaging to the effect that Kelowna provides high quality, dependable water to those it serves and that same quality should be available to all throughout the city.  To implement this priority, its first action will be to conduct a value planning exercise to review the 2012 integration plan.

2015-09 – Amalgamation not the goal
Speaking about the council priorities, Mayor Basran states that ““The city doesn’t want to take over water boards, This is about providing good quality drinking water.”

2016-02-08 – Amalgamation and city control is the goal
As part of the state of the city address Mayor Basran delivered to the chamber of commerce, he made it clear that council believes that the delivery of all water services in the city should be under the control of city council.  He argues that citizens would not stand for five different fire departments with five different fire chiefs, all funded differently, and that therefore they will see the logic in having only one water provider for the city of Kelowna.  New stories tend to reflect perspective that irrigation districts are protecting their turf in the face of what would be best for the city as a whole.   In reference to the provincial policy to not fund improvement districts and to aim for their long run dissolution, the mayor is quoted as saying ““So, we’re just doing what it appears the province wants us to do.”

2016-05-11 – Letter to SEKID voters
The city sends a letter directly to those served by SEKID arguing in favor of amalgamation of the water utilities.  In the letter the city states that the aquifer SEKID proposes to use to supply water for its system upgrades cannot actually supply the water, thereby undermining SEKIDs credibility as an organization that can effectively meet the water supply needs of those it serves.  Through the value planning exercise conducted later, SEKIDs assessment of the groundwater supply it was proposing to use was vindicated.

2016-11-14 – Value planning statement of principles
The province announces that the five utilities have agreed to a statement of principles related to the undertaking of a value planning review of the 2012 plan.  The value planning workshop, the essential element of the process, took place between the 9th and 13th of January, 2017.  The workshop is an opportunity for outside experts together with local experts and key stakeholders to brainstorm new approaches to address the issues that the 2012 plan was developed to address.  The process is guided by terms of reference that describe what is to be considered and what is not to be considered.  In this case, the process considered only technical solutions that could occur if such a plan could be developed without having to honor the service areas of each water provider separately.  Issues of asset ownership, governance, water licences, etc. were not to be considered.  Black Mountain Irrigation District, Rutland Waterworks District and Glenmore Ellison Irrigation District opted not to participate.

2017-02-28 – Value planning final report released
The report of the consultants is made public.  It suggests that the integrated solution that was developed would save approximately $100 million in capital costs, relative to the 2012 plan.  This is about three quarters of the costs of the 2012 plan.  Effective use of this infrastructure requires relying on Mission Creek to supply about three quarters of the water supply for Kelowna residents.  If this can be achieved, then pumping cost from lake sources can be reduced.  If the water quality from Mission Creek continues to be sufficient to satisfy health standards, then filtration costs can be deferred until such time as Mission Creek water quality changes or health regulations change.  The plan identifies an interesting solution which, if it can be implemented as planned, would save both capital and operations costs in the delivery of water to Kelowna residents.  The plan was conceived as if all five utilities were partners, even though three of the five did not participate.

As someone who has been listening to the conversations about water in our city and valley for a decade now, it is quite apparent that like everywhere else, politics and water are intimately connected.  I was wrong in my recollection of how the politics has manifest itself, and am grateful to city staff for calling me out and giving me the impetus to put together this timeline.  I regret any confusion this has caused both to people associated with the city and anyone else who has read my posts.

I hope that my error does not distract from what I think are the important questions, questions which people much better qualified than I should answer.  These questions include:

  1. How much water can Mission Creek reliably supply, in the face of climate change, and with respect to environmental flow needs?  We have expertise in the valley that can contribute to modeling the likely climate change impacts on Mission Creek, and understanding how that will affect agriculture and environmental needs.
  2. How will an integrated Kelowna water utility be governed?  The city wants all water governance to be accountable to city council.  However, there are other models.  Los Angeles county has more than 200 water utilities, not necessarily corresponding with municipal boundaries (UCLA).  Metro Vancouver manages the north shore sources and provides treated water to the municipalities who are responsible for final distribution to households.  Fire services (alluded to by the mayor when arguing for cities taking over the utilities) are also separate by municipalities, with procedures in place to support each other when needed.
  3. How will agricultural interests be protected?  What does this mean?  Will agriculture be guaranteed priority access to that volume of water specified in the current agricultural licences – i.e. like an agricultural water reserve?  Will they be guaranteed the same security as they have now?  Cities typically do not manage irrigation water.  Rather, irrigation districts manage irrigation water, and may enter into agreements with cities to supply bulk water, and to be part of a drought plan should cities nearby be unable to meet needs during a drought.
  4. What can go wrong?  If the assumptions behind the plan are wrong, what does that do to the cost savings?  Climate change impacts, resolutions of water rights for indigenous peoples, …  How sensitive is this plan, in terms of cost savings, to everything working out right?  The value planning report does not offer any such sensitivity analysis.

The city is hoping for a significant amount of provincial money to support the initial phase of this project.  Getting that money amounts to recovering for Kelowna tax money that we as residents of Kelowna pay to Ottawa and Victoria.  I am certainly in favor of our city getting a just share of those tax dollars for projects that ensure we are not suffering relative to other Canadians and British Columbians.  I do hope that if the province does commit to supporting us in addressing water issues in Kelowna, that it does not tie our hands so tightly to this specific proposal that we cannot do the research required to ensure it is the right plan.

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