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Collingwood, New Tecumseth set to update costs of pipeline drinking water agreement

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The Town of Collingwood owned a rail line between Collingwood and Utopia and agreed to grant an easement over part of the railway lands to accommodate the transmission of water. Photo credit: Kristjan, stock.adobe.com

New Tecumseth is ready to confirm how much it will pay for the expansion of the Raymond A. Barker Water Treatment Plant in Collingwood, Ontario, which has piped drinking water one hour south for more than 20 years as part of a collaborative agreement.

The towns, which have worked together since the expiration of their previous agreement in 2020, recently formed a new draft agreement to better position each municipality as their populations continue to grow and require greater water capacity.

The pipeline, which connects to a local reservoir, essentially began to support the construction of the sprawling Honda manufacturing plant expansion in Alliston, Ontario. The Town of Collingwood owned a rail line between Collingwood and Utopia and agreed to grant an easement over part of the railway lands to accommodate the transmission of water.

An announcement from the Town of Collingwood noted that the new agreement will include “an updated supply rate structure” that is “consistent with the principles of water rate setting by the American Water Works Association,” including cost recovery and asset management into the future.

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“Collingwood has supplied water to the Town of New Tecumseth for over 20 years, and a new agreement will ensure that the best interests of both communities continue to be met in a transparent and financially responsible manner,” announced Sonya Skinner, Collingwood’s chief administrative officer, in a statement. “This collaboration will achieve greater efficiencies and enable growth for both communities,” she added.

The new rate will begin in January 2023, with a four-year transition period. It was established with the aid of Hemson Consulting Group. The rates range from $0.5 – $0.58 per cubic metre in 2023 and increase to $0.62 per cubic metre by 2026, assuming a 2% consumer price index. Until the new water treatment plant is built in Collingwood, New Tecumseth must purchase 9,000 cubic metres on average per day, up to a maximum of 9,500 cubic metres. In 2027, the minimum quantity will be 13,400 cubic metres. A new administration fee of $0.04 per cubic metre will commence on commissioning of the newly expanded water treatment plant.

In the terms of the transfer of pipeline ownership, New Tecumseth will be expected to pay $6.5 million to Collingwood in exchange for an 18.5% interest in the pipeline.

The two municipalities will also form a joint water committee to review planning for future expansions, maintenance and capital budgets, as well as supply rates.

“Both municipalities have been committed to working together to address our water supply needs for today and in the future,” said Blaine Parkin, New Tecumseth’s chief administrative officer, in a statement.

Pending public comments and feedback, a final council vote is expected to take place in Collingwood on August 18.

The term of the agreement is for a period of 10 years.

Notably, Collingwood halted local construction in spring 2021, when officials discovered that water demand was beginning to outpace capacity.

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