October 08, 2013

Water Reserve Fund well spent, report says

As published in The Erin Advocate

The Town of Erin has almost drained its Water Reserve Fund, but the money has been properly spent on water system projects, according to Finance Director Sharon Marshall.

She reported to council recently after Mayor Lou Maieron requested a full accounting of the Fund, which now sits at $86,592.

Disbursements have totaled $989,985 since the fund was set up in 2003, with an initial deposit of $177,250. That was taken out of the huge payment of $2.85 million that the Town received when it sold the Erin Hydro Commission to Hydro One in 2001.

Marshall said the bylaw to create the fund clearly stated that its purpose was for “maintaining or improving the water systems of the Town of Erin.”

The fund earned $159,175 in interest, and the only other deposits were $65,150 from an unspent surplus on capital projects in 2008, and $675,000 from a settlement with Greening Donald (Central Wire) in 2007, for contamination of Well #5 in the north end of Erin village.

“I did not see any clause or condition that restricted the Town’s use of the $675,000 settlement money,” said Marshall. “Our commitment was to decommission Well #5, which we subsequently did. There is no reference to a requirement that the funds be used to drill or replace Well #5.”

The Town stopped using Municipal Well #5 after environmental monitoring found trichloroethylene (TCE), a cancer-causing industrial solvent, in the water. The result was a settlement through the Ontario Superior Court of Justice with Greening Donald (Central Wire), which owned the property next to the well.

In 2007, they agreed to install and operate a groundwater control and treatment system on the property and pay the Town $675,000 for all claims. Council allocated all but $25,000 (legal fees) of this to the Water Reserve Fund.

Expenditures from the fund have supported Water Department expenses, including software, vehicles, studies, hydrants, water tower maintenance, pumps and pumping stations. Water expenses are normally supported by revenue from water bills.