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Abbotsford, Mission Part Ways over P3 Water Project

As their populations swell, the towns no longer find it easy to share.

By Tom Sandborn 6 Jul 2011 | TheTyee.ca

Tom Sandborn covers labour and health policy beats for the Tyee. He welcomes your feedback and story tips at tos@infinet.net.

The Mission and Abbotsford have a lot in common, but not when it comes to how they are going to meet their future water needs.

The two booming British Columbia suburbs, which face each other across the Fraser River, have for decades co-owned a water and sewage system, but now they are taking very different approaches to public works and citizen input.

In the wake of a storm of public protest, the district of Mission has chosen to drop out of a joint application to the federal government for partial funding for a water works project to be completed with private investments and municipal funds.

The city of Abbotsford, on the other hand, is proceeding with the application and will seek voter approval for the move in the fall.

The communities have experienced significant growth in the last two decades, with Abbotsford alone accounting for 60 per cent of the region's population surge. Today, with more than 130,000 residents, Abbotsford is the fifth largest city in B.C.

The population of the Fraser Valley Regional District that includes Abbotsford and Mission is expected to reach 462,000 by 2031, and planners say the growth will create a need for up to 400 million litres of new water capacity a day.

Abbotsford goes it alone

The two settlements have long shared some of their infrastructure. As Mission mayor James Atebe told The Tyee. "We've always had a good relationship with Abbotsford."

But on April 4, residents of Mission flooded their council with protests against a proposal that would have seen their district and Abbotsford make a joint request to the federal government for funds to help create a new system to draw water from Mission's Stave Lake, then purify it and pump it across Mission to link up with the existing water system.

In the end, Mission council, influenced by public protest led by local groups like Mission Abbotsford Water Watch and Citizens United Against Urban Sprawl and the Canadian Union of Public Employees decided not to join with Abbotsford in asking Public Private Partnerships Canada for a grant to develop the new Stave Lake system. P3 Canada is a federal funding body designed to encourage local governments to build new infrastructure in partnership with for-profit private companies.

Abbotsford, on the other hand, has decided to go it alone in approaching P3 Canada for support, and will hold a referendum in conjunction this November's municipal elections to ask city voters to endorse the project.

If approved, the funding from P3 Canada would cover about $70 million of the estimated $300 million plus costs for the Stave Lake project, although critics of the proposal have argued that P3 projects frequently end up costing the tax payers far more than preliminary estimates suggest.

According to a web page created by Abbotsford Mission Water Services, "The Stave Lake Water Supply and Treatment Project includes the construction of new source works, a water treatment plant, and transmission mains to channel water into the existing Abbotsford and Mission distribution systems. The new Stave Lake system will be designed to an ultimate capacity of 400 Mega Litres per Day (MLD) and will be implemented in three phases. Phase 1 is anticipated to be completed by 2015 and will have a capacity of 150 MLD. Phase 2 will extend capacity to 225 MLD by 2024. The final phase will be built sometime after 2031.The new Stave Lake water supply will be filtered and disinfected to meet both BC Drinking Water Regulations and Guidelines for Canadian Drinking Quality."

What's not to like about a project that with help from the feds will provide abundant water as thirsty housing developments spring up across the Fraser Valley? Critics are concerned about giving private business too big a role in operating local water works, and say there hasn't enough transparency in the process.

"We only learned of the proposal from an article in the Abbotsford News, even though the city has been looking into it since June of 2010," said Janet Chalmers, a member of Mission Abbotsford Water Watch, a group formed recently to oppose a project.

"There had been no public discussion," Chalmers told The Tyee.

'No war on our side of the river'

Jenny Stevens, one of the Mission councillors who helped vote down the P3 proposal at the April meeting, told The Tyee that "P3 projects are full of peril. Water, God willing is still a basic need and right. We don't want private companies controlling our basic needs and rights. The whole thing was getting out of control."

Stevens said she was not opposed to private sector involvement in designing and building infrastructure like a new water system, but she was not willing to support a proposal that would see the profit making business involved in operating the system on an ongoing basis. She said Mission had lots of time to make its own plans, but she emphasized that the different tactics chosen by her district and the neighbouring Abbotsford did not signal a larger conflict.

"We are not fighting with Abbotsford. There is nothing to gain by conducting a war, and there is no war on our side of the river," she said.

Stevens said that existing partnerships between Mission and Abbotsford, such as the joint water and sewer commission, would not be threatened by Mission opting out of the new Stave Lake project. She hopes that if Abbotsford goes forward with its P3 plans, it will free up more water from existing sources for Mission's needs.

Abbotsford mayor George Peary, an advocate of the P3 option for new water works, was not so serene. He told the Vancouver Sun shortly after Mission opted out that "We would pay for the whole thing, and if some day they needed more water, they could buy it, at a premium, since they opted out of any capital investment."

Abbotsford councillor Patricia Ross told The Tyee she believes her city needs a new water source to cope with impending growth, but she has been swayed by public input to view the P3 approach with some skepticism.

"The city says the P3 system isn't privatization, and that the city will retain control of water, but I hear from a lot of citizens who are concerned. And there is an issue of respect. Abbotsford and Mission had an agreement to apply to P3 Canada jointly and not to go forward alone if one or the other government decided not to proceed. Now Mission has made that decision and Abbotsford is going on alone. To me, if you give your word, you keep it. We had an agreement and we should stick with it."

Ross declined to comment on whether she would campaign against the P3 referendum in November.

"I will urge voters to inform themselves and make their own decision," she said.

P3 approach well analyzed: Abbotsford mayor

Mayor Peary hopes that Abbotsford voters will decide in favor of the P3 proposal in the fall election.

"The Stave Lake Water Supply and Treatment Project is beyond the City's capacity to develop alone. A business case analysis was conducted to explore different ways to deliver the project, including the traditional approach used by the City, and public private-partnership (P3) approaches. Through an analysis of project risks, costs, and schedules, it was determined that a P3 approach would be the most cost effect and efficient model of development for the project.

"Additionally," said Peary, "if the project is developed as a P3 it may qualify for financial support of up to approximately $66.5 million from the Federal P3 Canada Fund. As a result, a P3 approach that bundles the design, construction, operation, maintenance, and partial financing into a single contract with a qualified contractor was recommended," Peary told The Tyee by email on June 28.

A business plan developed by consultants Deloite and Touche for the city of Abbotsford supports the mayor's argument that the P3 model offers cost savings for the city in building the Stave Lake project.

However, as critics of the project note, the report also says that annual operating costs would be close to a million dollars higher under the P3 model than if the water was operated by government.

'Fundamentally flawed': CUPE researcher

Mildred Warner, a Cornell University urban planning expert, has examined many of the studies generated over the years examining whether private or public funding is the most cost effective option for creating new public infrastructure. She argues in a recent study that there is no evidence that private investor involvement model ends up saving the tax payer money.

"The empirical lessons from thousands of local government managers tell a clear and compelling story. Water service is a poor candidate for privatization. There are better alternatives," she writes.

Local critics also cite earlier projects built under the P3 model such as the Canada Line that have ended up costing taxpayers far more that originally estimated. CUPE researcher Blair Redlin argued to Abbotsford council that the P3 business plan was "fundamentally flawed."

"Canada has an exemplary record of delivering high quality water services primarily through publicly operated systems," Redlin told The Tyee. "A choice to allow for-profit operation of this public utility should be a problem for anyone who cares about quality public services. There is no good reason to give up control to private companies."

Mission resident Tracy Lyster thinks that Mayor Peary has got it wrong when he says the P3 model works best for Valley residents. Lyster, who speaks for the Citizens Against Urban Sprawl Society, calls the project Peary backs "a bailout for sprawl." Referring to the Stave Lake proposal as "sprawl water," the Valley psychologist says that before building expensive new water projects, Mission and Abbotsford should improve their current systems and look critically at what she calls "development at any cost."

Lyster told The Tyee that she was concerned about the negative impact that the new water project would have on the abundant wild life that currently exists in the rural Silverdale region where she lives, and argues that neither Mission nor Abbotsford should see extensive new suburban style housing developments.

"We need a smart growth plan, with lots of infill and waterfront development. Current development proposals are completely car dependent."

Expand or conserve?

One consultant's report commissioned by Abbotsford Mission Water and Sewer Services in 2009 challenges the planning orthodoxy that population growth must be matched by new capital investments in water projects. The Polis Project on Ecological Governance argues in the report that the water needs of the region's growing population can be met by a robust commitment to water conservation.

"The Conservation Commitment scenario explores a commitment to securing the water necessary for a thriving community through conservation efforts," write the Polis researchers. "A 45 per cent reduction in annual average daily water use by 2031 would be required to meet this target while providing services for the increasing population. Peak day demand reduction of approximately 150 MLD would be targeted. This is the preferred scenario."

Abbotsford's mayor Peary does not think that a Conservation Commitment policy will be enough to meet his city's needs.

"While more efficient water use will assist Abbotsford in addressing short term water shortages, a new water source is needed to meet water supply demands anticipated by 2016," Peary said.

In November, Abbotsford citizens will weigh in on all these debates as they respond to the upcoming referendum on the city's proposed P3 water works project.  [Tyee]

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