White Rock city manager Dan Bottrill addresses a crowd of about 70 who turned out for an update on the city's efforts to acquire its water utility.

White Rock, Epcor water negotiations ‘not going well’

Expropriation cited by White Rock leaders for utility acquisition.

Negotiations between the City of White Rock and water supplier Epcor over control of the utility are “not going well,” and the time has come to explore other options, including expropriation, officials announced Tuesday.

“We have been negotiating now for the better part of two years,” Mayor Wayne Baldwin told a crowd of about 70 people that turned out to the White Rock Community Centre for an update on the effort and an opportunity to provide feedback on next steps.

“Enough is enough. We’ve got to do something now.”

Epcor spokesman Tim LeRiche was not at the meeting but told Peace Arch News Wednesday that he could not speak to how the negotiations are going.

“Basically, it’s business as usual for us. We respect the right of the community to consider options for its future regarding water structures,” LeRiche said.

The city announced its intention to explore acquiring the water utility in March 2013. Three months later, they gave notice to Edmonton-based Epcor of their intention to assume ownership, and directed staff to commence negotiations.

Given the “disappointing” progress of negotiations, expropriation is among three options the city now has, city manager Dan Bottrill told attendees Tuesday. They can also continue to negotiate, or exercise their contractual right to acquire the utility.

With negotiation, there is no guarantee of success, he said; and, both of the latter options would be lengthier endeavours.

Bottrill described expropriation of assets for municipal purposes as one of the city’s statutory rights. And while it could require a finding by the court – only if the parties can’t agree on fair market value – it would be the quickest route to acquiring the utility.

“The big advantage is you acquire it now,” Bottrill said.

The majority of residents who spoke were supportive of the city owning its water system.

Hannah Newmann described expropriation as “really your only answer,” and questioned how much it would cost – an amount Bottrill estimated at $20 million. The money, he said, would be borrowed through the Municipal Finance Authority – which would mean a lower interest rate fixed over a longer term – and likely paid off over 30 years.

Ken Jones, a former city councillor and MLA, also agreed with expropriation, but said land on Oxford Street owned by Epcor and currently being eyed for a two-tower residential development should also be claimed in the move and used to bolster White Rock’s parkland.

“The value of that land is only in its rezoning and that’s totally in the hands of the city. We should seriously look at that,” Jones said, to applause.

Bottrill, however, said that parcel would not likely be part of an expropriation and “should be treated like anybody else who owns property and wishes to develop it.”

Another resident questioned the condition of the water system, and the risks of taking that on.

Epcor is in the midst of $11-$12 million of upgrades to the system, prompted by contamination in 2010 that led Fraser Health to order the system be chlorinated by June 2016. Chlorination is estimated at 30 per cent of the cost. The rest of the work is to include a reservoir on Oxford Street and a new reservoir on Merklin Street. Should arsenic and manganese levels rise, treatment for those issues would add an estimated $10 million to the cost, Bottrill said.

He said the upgrades are inevitable, regardless of who owns the system. The benefit of ownership, he noted, is control.

Bottrill said another advantage of owning the utility is that the city cannot legally profit from it. With no change in ownership, however, Epcor is projecting a profit of $428,000 in 2015 and $878,000 in 2017, the final year of its Total Water Quality Management Project – and all of those funds will go straight to Edmonton.

Resident Andrew Schulz said he also supported acquiring the utility but only if White Rock hooks up to Metro Vancouver’s system. Schulz cited the potential for liability should a substantial issue with arsenic or manganese develop, but Bottrill said liability is “a non-issue for a municipality.” As well, once the utility is acquired, the option to tie in to the Metro system will be available for “forever and a day.”

One resident expressed concern that the city would contract out the utility’s operation, as they have with “everything else.”

Another, Sharleen Hamm, encouraged the city to try mediation.

Only one resident spoke in favour of maintaining the status quo.

Gordon Hammond – noting he is a “friend of Epcor” – said he has never had a problem with Epcor’s service or the cost of it.

“I’m quite happy to keep Epcor,” Hammond said.

Bottrill told PAN Wednesday there is no firm timeline for a decision on next steps, however, “what I heard was, get it done and the sooner, the better.”

He expects to have a report and recommendation ready for council’s next regular meeting, which takes place Monday (June 22).

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