FAQs: Manotick Watermain Link (Phase 2)
As the City’s Manotick Watermain Link (Phase 2) project through Long Island in Manotick is proceeding, we have received many questions and concerns from residents with respect to connecting their properties to municipal water. This FAQ page is designed to answer and address the questions that we have received from the community.
I know that the answers on this page might not be fully satisfactory. I am sorry that the costs are as high as they are, and that the system appears unfair. It is nonetheless the system that is applied across the City and one which others on Council would not support changing at this time.
Background
The Manotick Watermain Link (Phase 2) project is intended to deliver additional watermain capacity to meet the growing demands of the Mahogany community. The project is being funded out of a mix of developer dollars and funds from ratepayers.
The project entails the construction of a new feeder main, connecting the new watermain that was installed in Phase 1 of the project, from the intersection of Bravar Drive and McLean Crescent, proceeding south along Bravar Drive, Long Island Road, Van Vliet Road, under the Rideau River to Antochi Lane, then connecting to the existing watermain on Main Street at the intersection with Antochi Lane.
Residents have the option to connect to the watermain. As is the case with every other municipal servicing project throughout the City, connecting to the infrastructure comes at a cost to the beneficiary. In those areas that are already developed these costs are typically recovered through frontage fees.
Who is paying for the infrastructure?
The cost of the infrastructure is being split between the developer and the water ratepayers. Including contingency, the project cost is close to $24.6 million, of which Minto Group has front-ended $12.8 million, plus HST.
Minto is front-ending those costs so that the City can build the infrastructure more quickly. Minto will be reimbursed for that front ending through the development charges levied on new homes built in the Mahogany community.
Development charges are paid for by home buyers. They inform the final sale price of a new home. In effect, this means that the Minto portion of the cost is being covered by future Mahogany residents.
The City portion of the infrastructure is being paid by those who receive a water bill. Residents who opt to connect to the watermain “buy in” to a portion of the cost of the infrastructure that is otherwise being paid out of City-wide water bills.
In every case throughout the City, residents pay for connecting to water infrastructure. Generally, these costs are “hidden” in the sale price of a property or as a portion of a rent price. Nonetheless, everyone who connects to water infrastructure in Ottawa pays for that connection, whether directly or indirectly.
Why am I subsidizing a Minto project?
It is not accurate to suggest that the cost of connecting subsidizes Minto. Rather, the costs that residents would pay if they chose to connect are the costs associated with connecting their properties and the costs that ratepayers are otherwise subsidizing with respect to frontage. Minto does not receive any benefit from residents choosing to connect to the watermain project.
Indeed, as the project is only moving forward due to Minto funding, it is more accurate to say that future Mahogany residents are subsidizing a portion of the infrastructure that residents on the Island would otherwise have to pay for in its entirety if they had pursued a local improvement. It is unlikely that this infrastructure would be proceeding, and it is unlikely that residents would have the option to connect, if not for the developer charges being levied to pay for this infrastructure.
Why am I paying a frontage fee?
The “Frontage Charge” means “the charge payable for connecting a Water Service to an original Watermain, or the replacement of an original Watermain, that is or was funded by the City.” This fee means that the beneficiary of infrastructure is paying into it being developed.
Every property that connects to water services must pay for that connection, whether through development charges on new properties, through the Local Improvement process or from frontage fees.
According to Section 32 of the City’s Water By-law, “every Person applying for a Water Connection Permit shall be required to pay a Frontage Charge, where applicable, before installation of the Water Service.” The by-law also discusses how the fee is calculated. You can read more about that here: Water (By-law No. 2019-74) | City of Ottawa. This is in lieu of the Local Improvement process.
It is important to consider that residents who connect benefit from infrastructure that extends well beyond just the portion that connects to their home. Just as residents drive on streets that are more than just the ones immediately in front of their property, so too do residents benefit from a network of water infrastructure. The fairest way across the whole City to fund this network of infrastructure is to have residents pay for the portion of the infrastructure that fronts their property so that taxpayers are not subsidizing the entire cost of capital construction that benefits specific residents.
Why would I connect if the cost is so high? Doesn’t the City want me to connect?
Choosing to connect is an individual choice. The City is neither encouraging nor discouraging residents to connect but rather is offering the opportunity to do so.
For those who wish to connect, it is less expensive to do so as part of the Manotick Watermain Link (Phase 2) than it likely would be under a Local Improvement.
How come the cost cannot be added to my property tax bill?
Due to the mechanism that the City is using to serve residents, the costs cannot be added to your taxes. It needs to be paid upfront to Drinking Water Services when you apply for the connection permit so that the City can recoup costs. The City is recouping the cost of the watermain installation, or a portion thereof, via frontage fees.
Similar to infill projects, which does not permit the use of taxes to pay for the servicing, the frontage charge must be recovered before the issuance of a connection permit.
These cost recoveries are outlined in the City’s Water by-law (Water (By-law No. 2019-74) | City of Ottawa) and changing how the costs are recovered would require a change to the existing by-law. Such a change would require ratepayers to subsidize new beneficiaries. Neither City staff nor Council supports such a change at this time.
Only Local Improvements allow for costs to be added onto a property tax bill. This is in part because the entire cost of the infrastructure is covered by the beneficiaries. A local improvement for this work would cost significantly more as the beneficiaries would have to cover the entirety of the cost on their own.
Residents that are interested in spreading out the costs of connecting to the watermain are encouraged to explore private lending options.
Why is this project being treated differently than other projects?
It is not accurate that the Manotick Watermain Link (phase 2) project is being treated differently than projects of a similar nature. For instance, in Phase 1 of this project, residents went through the identical process, paying upfront upon application for their connection permit.
That being said, some projects are advanced as Local Improvements; these are significantly different than the Manotick Watermain Link project and are often more expensive as the project beneficiaries must pay for the entirety of the cost. You can learn more about local improvements here: Local Improvements | City of Ottawa.
Every resident pays when they connect their property to municipal water and wastewater; these costs are generally paid through development charges which are passed on directly to home buyers in the form of a higher final property cost when the property is first sold. These costs are then generally amortized within a mortgage.
While the upfront cost can be surprising and often unaffordable for many residents as a lump sum, it is nonetheless the City-wide policy that those who benefit from connecting to a service must pay for that connection and contribute to the overall cost of the infrastructure expansion.
Why is this project not being considered as part of a local improvement?
The local improvement process is a standardized, provincially regulated process.
Local Improvements are requests for new or replacement municipal infrastructure intended to upgrade or improve certain conditions within residential, commercial, and industrial areas of the municipality. This process does not apply to infrastructure in new developments. Given that roughly half of the project costs for the Manotick Watermain Link (phase 2) project are being raised through development charges and that the project is only advancing because of these development charges, the project is ineligible for consideration as a local improvement.
A Local Improvement may be requested by property owners through a petition-based process. When a Local Improvement is approved, costs are shared by all property owners who benefit from this project and the City. Local Improvement works can include noise barriers, watermains, roads, sidewalks, sanitary sewers, storm sewers, and ditch alteration (where applicable).
A local improvement is initiated by residents themselves. You can learn more about local improvements here: Local Improvements | City of Ottawa.
The Manotick Watermain project is being funded to a significant degree by the development charges collected on the new homes in the Mahogany community. If the project were not collecting these development charge dollars, it would be significantly more expensive for beneficiaries to connect. It is likely that if this project had been initiated as a local improvement, the costs to residents would have been higher and there may not have been enough support to advance the project.
What can be done to change the policy?
The policy for assigning costs to the beneficiaries of watermain connection as a condition of that connection is applied City-wide. There is no process for exempting properties from these costs. Changing that City-wide policy, whether as an exemption for the benefit of residents on the island or as a City-wide policy change, would require direction from City Council.
At this time, unfortunately, there is no Council support for such a change as it would have the net effect of increasing water rates City-wide to subsidize future beneficiaries.
Who do I contact if I have additional questions?
Our office can be reached any time at ward21@ottawa.ca. Should you have additional inquiries, please do not hesitate to contact:
City Project Manager:
Julie Lyons, P.Eng.
Senior Engineer, Infrastructure Services Design & Construction – Municipal
City of Ottawa
Tel: 613-580-2424 ext. 13345
City’s On-Site Representative:
Derek Bekkers
Construction Technician
City of Ottawa
Cell: 613-612-9254
City’s Contract Administrator:
Katie Owens, P.Eng.
Civil Engineer
J. L. Richards & Associates Limited
Tel.: 343-804-5380
Cell: 613-806-2103
Contractor’s Representative:
Michel Noel
Project Manager
R.W. Tomlinson Limited
Cell: 613-806-2307