- explains water rate increases, moratorium
on large industrial & greenhouse projects -
by Sylene Argent, Local Journalism Initiative
The Town of Essex invited Union Water Supply System (UWSS) to attend the March 3 Council meeting, as a municipal shareholder of the organization that serves a large portion of Essex Centre.
Essex CAO Doug Sweet explained the purpose of the visit was to explain to Council the recent restructuring of UWSS.
Rodney Bouchard, General Manager and Chief Executive Officer of UWSS, explained that in August of 2022, the four shareholder municipalities of Essex, Lakeshore, Leamington, and Kingsville approved the undertaking of adoption of restructuring the business case into a municipal service corporation.
As such, UWSS was incorporated in February of 2023.
In Essex, UWSS supplies water to around 10,000 residents in Essex Centre.
It took some time for UWSS to operate the system as a municipal service corporation, Bouchard noted. That started in January of 2024 with the first approved budget and the transfer of operations of the system from the old board to the new municipal service corporation.
The actual assets of the old structure were transferred in April in 2024. One of its first big tasks, Bouchard said, took place in December of 2024, which was securing a $60M credit facility to started moving its capital program forward.
In January, the board approved the UWSS Operation and Capital Budgets.
The system is still owned by the municipalities as a public entity, Bouchard noted. It is not privatized. Shareholder interest is based on the consumption of water of each municipality.
As such, Leamington has the largest share at 53%, followed by Kingsville at 38.72%, Essex at 4.92%, and Lakeshore at 3.36%. The shareholder interest is updated every four-years, with the next one to occur this month. Leamington and Kingsville have the biggest portion because of greenhouses, Bouchard explained.
The new board composite is built upon the previous, which had 12 members. Previously, they were elected officials. Bouchard said they wanted to change that. The board still has 12 members, appointed by the municipal shareholders. Each shareholder can appoint one director, and can appoint an additional director for each 10% water consumption. No more than 50% of director appointees can be either an elected official or municipal employee. Other director appointments are to be independent of the municipality.
The current board is composed of six elected officials and six independent directors.
Each of the municipalities pay the same bulk treatment rate.
All profits are reinvested. There are no dividends, Bouchard noted.
“It is not source to tap. The four municipalities still own their own distribution system, and remain responsible for them. We just send water through that system and we treat and transmit it.”
This change allows UWSS to apply for grants. Bouchard noted it has not been successful in that yet, as there have been no grants specifically directed to its operations.
“But we are still working at it, and we are pretty confident we are going to get some grants here shortly,” he said.
“The biggest change is we can borrow on our own now, and the money we borrow doesn’t reflect on municipal books,” he added.
In addition, another change is that every customer in which it sends water sees UWSS’s treatment and transmission rate on their bill.
It now also bears some of the responsibility for water loss, which it did not before.
He added UWSS has a capital program that is around $200M for the next less than 10-years. It includes a lot of projects to ensure water is transmitted to the municipalities and treated.
One of the bigger projects coming up includes a water treatment expansion. Bouchard noted there is currently a moratorium in place for any large greenhouse or industrial projects, “because we are basically at capacity for water treatment,” he said.
The design for the expansion project will begin this year. It is hoped it is providing new water by late 2027 or early 2028. That is a $65M project.
Water demand in the past 10-years has increased significantly, 49% Bouchard added.
This year, a budget was submitted to the Board for approval, which Bouchard said included some significant increases in some of the rates to accommodate those capital projects.
He shared that its water rate in 2024 was .7339 per cubic meter. It asked for an increase of .0428 to accommodate the doubling of chemical costs. That also accounts for some of the water loss it now has partial responsibility for.
It also requested a two-cent increase per cubic meter to help fund the capital renewal program.
A special category was added, so UWSS can start asking the agricultural sector/greenhouse infrastructure to pay into the system a bit more. The special rate is a capital levy of one-cent per cubic meter to start to go towards capital expansions.
Bouchard’s slideshow will be viewable on the Town of Essex website.
Deputy Mayor Rob Shepley loved to see the special rate for the greenhouse growers, as he said they are a big user of water.
In answering Councillor Joe Garon’s question on the 49% ten-year growth, Bouchard estimated it is around 80-85% contributed to greenhouse growth.