A plaque unveiled by the City of White Rock this year commemorates the acquisition of the water utility from Edmonton-based Epcor in 2015.                                Twitter photo                                File photo                                A plaque prepared by the City of White Rock commemorates the acquisition of the water utility from Edmonton-based Epcor in October of 2015.

A plaque unveiled by the City of White Rock this year commemorates the acquisition of the water utility from Edmonton-based Epcor in 2015. Twitter photo File photo A plaque prepared by the City of White Rock commemorates the acquisition of the water utility from Edmonton-based Epcor in October of 2015.

Negotiations ‘delay’ White Rock water purchase info

Mayor Wayne Baldwin gives clearest account to date of the city’s decision to purchase the water utility from Epcor.

Slowness of ongoing negotiations has been one of the key factors delaying full disclosure of details of White Rock’s purchase of its water utility, according to Mayor Wayne Baldwin.

Under rates applied for in 2013, Edmonton-based company Epcor would have been taking an estimated $1 million annually from White Rock consumers by the end of 2017, Baldwin said as a preamble to his recent presentation of the city’s 2016 annual report.

“Epcor has had a cash cow in White Rock and was reluctant to give it up,” he said, as he provided the most succinct public summary to date of the city’s rationale for its decision in 2013 to purchase the utility from Epcor.

It was weeks after the sale was announced in August 2015 that the city confirmed no purchase price had been agreed to, and that the city had signed a three-year non-disclosure agreement.

In his June 28 preamble, Baldwin remained adamant that all documents pertaining to the sale will be released once the transaction with Epcor is completed.

Laying out a chronology of the events leading to the decision, he said it made the most sense in protecting the financial and health interests of residents.

Connecting to Metro Vancouver water would have taken four years to complete at a cost of $28-$30 million, he said.

Instead, acquiring the utility for an estimated $14 million enabled a two-year process of providing arsenic and manganese treatment facilities – for which the city has since received federal and provincial grants of almost $12 million.

Had the city not acquired the utility, “residents would have been paying forever for improvements and $1 million would have been leaving the city for Edmonton in perpetuity,” the mayor said.

It was an account consistent with background presented to the Peace Arch News in an earlier discussion last month at city hall with Baldwin and chief administrative officer Dan Bottrill.

At that meeting, both acknowledged they have received much negative feedback for city lawyers’ continued efforts in Supreme Court to block the release of meeting minutes including the business case for the purchase – originally sought in an FOI request from resident Ross Buchanan, and subsequently ordered released by the Office of the Information and Privacy Commissioner.

“There are people saying ‘what are you hiding?’” Baldwin said, noting he believes the benefits of the purchase will become clear once the full facts are released.

“I’m not going to back down.”

Water quality – including issues of chloramination reacting with aging pipes – would have been the same whether Epcor had retained ownership of the water or the city had decided to connect to Metro Vancouver, they maintained.

Both said the city is fighting release of the information since it would compromise ongoing negotiations with Epcor.

Asked how negotiations can be ongoing when officials have said the process has gone to arbitration, Bottrill interjected that it had not yet reached the arbitration stage. The city has so far paid Epcor close to $14 million for the utility based on fair market value, with the remainder to be determined through either negotiation or arbitration, he said.

Providing the information requested by Buchanan while negotiations are still underway – particularly the business case for the acquisition – would undermine the city’s position, Bottrill said, likening it to a real estate transaction in which it would be unwise for buyers to reveal what they were ultimately prepared to pay.

In his statement to the public, Baldwin noted the city had had two previous opportunities to purchase the utility – once in the late 1980s when it was still owned by White Rock Utilities Ltd.

“The council of that day decided against the purchase,” he said, adding that when Epcor approached the utility in 2005, it was accepted before the city was able to make its own offer.

Baldwin noted that in January of 2013, as part of its rate application, Epcor raised a $12 million Total Water Quality Management Program that would have included chlorination of White Rock water and upgrades to the water distribution infrastructure.

“That would have resulted in increased rates to the consumer,” Baldwin said, adding that it was calculated that, by the end of 2017 Epcor would have been taking as much as $1 million annually in water rates paid by White Rock residents.

“The money could have been put to better use acquiring the utility and applying it to upgrading the system,” he said.

When the city decided to buy the utility, negotiations with Epcor “proceeded very, very slowly,” the mayor noted.

“We paid $14 million (as the first payment) and we believe that to be close to the final price,” he said.

“It’s been a frustratingly slow process for council and staff – Epcor has not been in any hurry to finalize this matter.”

Baldwin said that “to the city’s knowledge” water quality has not changed since Fraser Health imposed a boil-water order and requirement for secondary disinfection in 2010, after seagull feces at the former Merklin water tower temporarily compromised the system.

Acknowledging that reducing arsenic and manganese deposits in the aging system is a top priority, Baldwin said the city was faced with a choice of building plants to achieve this or abandon the use of the city aquifer and connect to the Metro Vancouver system.

But Baldwin said the latter choice was “never an option that was open to us,” adding that it made more sense for the city to spend $2 million to make improvements to the system over two years than spend $30 million for a four-year process of connecting to Metro Vancouver water.