[As Council struggles with a draft budget increase of 14.5%, I thought I’d write a few posts summarizing some of the key drivers behind staff’s proposed increases. I’m planning on following up with posts on the Police Budget, new FTEs requested, as well as the Capital Plan in general.
I do want to be clear that this post is entirely my opinion and does not reflect the Township as a whole, or the rest of council.]
On Monday, February 10th, staff presented us with the Sanitary Sewer Asset Management Plan (I’ll call it the “Sewer Maintenance Plan”), the first of several plans detailing how they propose to address a long-standing infrastructure deficit.
It’s a sobering report. Conducted by external consultants, it relies on video camera assessments to evaluate the condition of our sewer pipes and pump stations and provides recommendations for their maintenance. The findings indicate that many pipes and stations are at or near the end of their useful life and need to be repaired before they fail. While the sewage treatment plant at MacLoughlin Point is owned by the CRD and funded through CRD taxes, the pipes that carry sewage from our homes and businesses to the plant are largely owned and maintained by the Township.
One key takeaway is that the majority (75%+) of the work needed—by cost—is due to the age and condition of existing pipes, not capacity constraints. This means the upgrades are primarily for the benefit of current, long-term Esquimalt residents, not to accommodate new development. This distinction is important because Development Cost Charges (DCCs), which we can assess on new developments, can only be used to fund infrastructure expansion caused by growth—not repairs or replacements for existing users. While I believe DCCs should still play a role in Esquimalt, they are not a catch-all solution. We need both DCCs and increased funding for infrastructure renewal.
The report outlines $10 million in immediate priority work where there is an “elevated likelihood of failure triggered by both condition and capacity concerns, and an elevated consequence of failure.” It also identifies $22 million in work with a “moderately high level of risk [of failure].” Additional needs—and funding—will arise over time as aging infrastructure continues to deteriorate over the next 20 years. These are massive costs for a small municipality. The only silver lining is that we don’t have the capacity to complete all this work at once, even if we had the funds—it will have to be spread out over two decades.
According to the report, the Township should be spending approximately $5 million annually to address this backlog and catch up on deferred maintenance. In recent years, we’ve been spending an average of just $1 million per year, primarily on reactive repairs when infrastructure fails and requires emergency fixes. Of that, only $500,000 has been specifically allocated to sewer infrastructure.
One question I asked was: What does “failure” look like in practice? Essentially, it means sewer backups in homes and businesses or urgent, costly repairs in the middle of the night to prevent further damage—both of which are far more expensive than proactive maintenance.
So, what does this mean for this year’s budget? Staff are requesting a 2% increase (about $736,000) to start building our infrastructure reserves. They recommend continuing to add at least a 2% increase annually for the next 12–15 years to ensure we have enough funds to address these issues proactively. For reference, in the 2021 census, Esquimalt had 8,565 households- so adding $4.5million to our budget (without cutting elsewhere), could mean a $500/year increase on average just for sewer maintenance. Note that this is NOT what is being proposed by staff in the in the current budget- the proposed annual 2% increase staff are proposing will gradually build up reserves each year over 8-14 years.
One question I’ve had is why the Township didn’t start actively addressing this issue earlier- it’s always more expensive to put off saving and maintenance for later. However, from speaking with colleagues in other municipalities and researching the issue, it’s clear this is a North America-wide problem. Many municipalities have underfunded infrastructure maintenance for decades, and now the consequences are catching up with them. Esquimalt may actually be better off than many, given its relatively high density, which means fewer kilometers of sewer infrastructure per home to maintain.
There are going to be similar reports, with what I suspect with similar financial consequences, on maintenance and upgrades required in the Stormwater system, our buildings (the Rec Centre, Archie Browning, and our Town hall and Works Yard), and our fleet. It’s going to be a lot of money if we want to be move from reactive maintenance to a more proactive approach.
A really big question for me that we’ll have to grapple with over the next couple of months: how do we decide how much to put aside to maintain the infrastructure we already have, and how best to dig ourselves out of the hole underfunding over decades has gotten us into. In a budget year with lots of other pressures, how do we balance all the needs while keeping taxes affordable for the residents of Esquimalt?
The presentation by Urban Systems is available here: https://esquimalt.ca.legistar.com/View.ashx?M=F&ID=63970&GUID=BB2B440E-B46B-4CE2-9886-FAC7F848E424
The Sanitary Sewer Asset Management Plan, by Urban Systems is here: https://esquimalt.ca.legistar.com/View.ashx?M=F&ID=63969&GUID=72119C33-DF6C-43DD-B46F-D096158F7571
The staff report on the Sewer Master Plan is here: https://esquimalt.ca.legistar.com/ViewReport.ashx?M=R&N=Text&GID=5&ID=35014&GUID=0196BCFD-1E56-4807-B1B4-1C7BF5AA4911&Title=Legislation+Text