It’s official: Collingwood and New Tecumseth are ready to sign on the dotted line.
Both municipal councils passed resolutions to approve a new Collingwood-New Tecumseth water agreement at their council meetings on Thursday night (Aug. 18), bringing to an end a two-year negotiation between the municipalities.
At Collingwood’s council meeting, Coun. Bob Madigan noted the process had been a hard one.
“I want to thank staff for taking into account all the questions asked over the four years,” said Madigan. “We are now in the driver’s seat, and I appreciate all the hard work. Thank you for fixing a once-broken agreement.”
The new agreement will be in effect for 10 years with an option to extend every 10 years once signed.
As part of the deal, Collingwood would receive a $6.5 million payment from New Tecumseth to buy back their interest in the pipeline outside of Collingwood town limits.
New Tecumseth will also pay $71 million of the costs for the expansion of the Raymond A. Barker Water Treatment Plant based on the proportion of Collingwood’s water capacity that gets sent to Alliston. The current total estimated cost for the water plant expansion is $120.9 million, with Collingwood's share at 37 per cent of that ($44 million).
“I was not supportive when I saw the original proposal,” said Coun. Chris Carrier during Thursday’s meeting. “For me, it comes down to realizing that our partners in New Tecumseth are new partners and I wish them well as they move forward with this discussion.”
Collingwood has been providing 6,000 cubic metres of water per day to New Tecumseth since 2008, and that won’t change under the agreement until the new water treatment plant comes online and capacity is expanded.
Key highlights from the new agreement include New Tecumseth purchasing Collingwood's 18.5 per cent interest in the pipeline outside town limits, for $6.5 million once the agreement is signed.
Collingwood would keep ownership of the pipeline from the water treatment plant to the town boundary.
Added to the agreement since it last came before Collingwood council on Aug. 8 is a clause that allows New Tecumseth to withdraw from the water treatment plant expansion project should it exceed the current budget by 10 per cent if all reasonable efforts to bring costs down are unsuccessful. If New Tecumseth does pull out of the expansion project, they will not be able to increase their water supply from Collingwood.
An administration fee of $0.04 per cubic metre will be charged to New Tecumseth based on flow. The maximum annual administration fee collected by Collingwood will be set at a rate of up to $400,000 per year for the first 10 years of the agreement.
The two municipalities will also form a joint water committee to review planning for future expansions, discuss maintenance and capital budgets, supply rates, resolve disputes, develop communications between municipalities, and address any other water distribution matters.
Collingwood has been sending water to New Tecumseth for 22 years.
In the late 1990s, the Town of New Tecumseth approached Collingwood to ask for help with water supply to support a Honda production plant in Alliston. A pipeline from Collingwood to Alliston was required and was built along the rail line that ran between the two municipalities.
An agreement was reached in June 1999 that saw Collingwood sending treated drinking water to New Tecumseth. The water was to be purchased at minimum quantities.
At the time, Collingwood had just built a new water treatment plant and had excess capacity.
The agreement between Collingwood and New Tecumseth expired in 2020, and the following year both municipalities paid for Hemson Consulting to update the supply rate model.
The agreed-upon model will be in place once the new agreement is signed. A signing event will be planned in the coming weeks.
With files from Erika Engel.
