Residents angry after RDN turns off the tap on water supply takeoverRegional district gives up on negotiations to buy EPCOR water system due to cost
Aug. 6, 2019 12:00 a.m.NEWS
French Creek Residents Association is upset with the Regional District of Nanaimo’s decision not to purchase the Epcor Water Utility in French Creek.
The RDN recently ended negotiations with EPCOR as they estimate the purchase of the water utility would lead to additional cost to residents due to increased water rates.
“The RDN is committed to providing quality services while being mindful of costs to residents, and we enact this commitment through thoughtful and well-informed decisions based on research and fiscal responsibility,” said Ian Thorpe, chairman of the RDN board of directors. “EPCOR and the RDN value the feedback we’ve received from residents, and we brought their interests to the table throughout the negotiation process.”
EPCOR will continue to provide drinking water to about 4,000 residences within the effected area.
This includes Electoral Area G (San Pareil, French Creek and Dashwood), as well as a portion of Town of Qualicum Beach.
FCRA president Rob Williams slammed the RDN for lack of commitment in seeing the negotiations through. He felt RDN staff were not experienced and knowledgeable on negotiating such financial matters.
“We believed right at the beginning, staff has no idea how to handle this, how to really enter into a negotiation, how to force the issue,” said Williams. “Whom am I to say that? We have a couple or two from our board who have been in those positions dealing in millions, buying and selling. So we know how it works. We’ve never seen anything out of the RDN staff. They’ve been putting us off. They won’t give us information. Now they tell us they can’t buy it without there being an increase in costs to users in French Creek which is not true. “
They association is frustrated the RDN would not release a consultant’s study it commissioned two years ago on the utility acquisition. Williams said if the valuation report did not support a purchase, the RDN would not have pursued it at the time.
“We were foolish to think they would embrace this because the numbers show it is feasible,” said Williams. “It is not feasible if you attempt to reconcile the debt based on what EPCOR is asking versus what the utility is worth.”
The RDN would not reveal how much EPCOR is asking for the water utility. Staff stated that “details of the negotiations are subject to a confidentiality agreement.”
Williams said the RDN could have followed the steps taken by the City of White Rock, which went through the same process with EPCOR in 2015.
When negotiations stalled, Williams said, White Rock decided to proceed with expropriation, forcing EPCOR to sell at an arbitrated price of $13.4 million for a utility that is five times the size of French Creek.
The RDN explained the situation at White Rock was “fundamentally different and not comparable.” The FCRA argued the RDN’s position on this is incorrect and regard the EPCOR-French Creek situation as exactly the same as White Rock.
The association sent a letter to the RDN’s director of water and Wastewater Services Sean de Pol, and to board chair Thorpe protesting the RDN’s actions and lack of focus since the purchase proposal was endorsed by the board in 2016.
“There has been substantial foot dragging by staff since then,” said Williams. “To say our (FCRA) board is upset with the RDN’s lack and passive efforts in conducting this negotiation is a considerable understatement. We have kept our mouths shut over the past three years so as not to rock the cart but we are done with that now. Our criticism will fall where it should, on RDN staff and the RDN board who are not providing direction because our representation is too diluted with only one director out of 19, most of whom represent the City of Nanaimo.”
As this time, the association has not decided what steps they need to take. Williams said they would like to do it after the by-election on Oct. 5 for the vacant Electoral Area G director position has been determined.
“We want to wait until candidates have been named so we can talk to them to get things rolling,” said Williams. “But we can’t let this sit. We are totally frustrated by the way the RDN has handled this.
In 2015, research done by the French Creek Residents Association determined that taxpayers could actually save money if the RDN purchased the private EPCOR system and operated it as a public utility.
In 2016, the FCRA approached the RDN with its research and the RDN, after obtaining a consultant’s report, began negotiations with EPCOR.
The EPCOR utility is classified as a private water system and is regulated by the provincial Comptroller of Water Rights. Water rates are reviewed every three years, and the French Creek utility rates were last reviewed and approved by the Comptroller in July 2018.
The RDN stated that EPCOR provides water service to French Creek at a comparable rate to similarly sized water systems operated by the regional district.