Order UW95-03 - UW31401.2 - North River - MacDonald v. North River (Mar 28, 1995)

IN THE MATTER of a dispute between Brian MacDonald and the North River Water and Sewer Utility Corporation.

On December 16, 1994, Brian MacDonald lodged a complaint with the Commission concerning a bill he received from the North River Water and Sewer Utility Corporation (the "utility") associated with the costs of sewer main construction carried out in front of lots owned by Mr. MacDonald on MacRae Drive in the Community of North River. Mr. MacDonald submits that the costs should be the responsibility of the utility. The utility submits that the costs are properly the responsibility of Mr. MacDonald.

At issue is the cost of main line construction carried out in 1994 along lots 19, 23 and 25 on MacRae Drive that were developed by Mr. MacDonald in the late 1980s-early 1990s. According to Mr. MacDonald, the lots in question were part of a subdivision plan approved by the community in 1987 and that, since this approval was issued prior to the approval of the core plan, the lots should have been included in the plan. The utility, on the other hand, submits that the lots were not developed at the time the core plan was submitted for approval and therefore were properly excluded from the plan.

A review of the core plans approved by the former Public Utilities Commission in 1987 and revised in 1989 confirms that the lots in question were outside the approved core-area plan. We understand that our colleagues of the day followed the practice of only including in a plan existing built-up or developed areas and not those either planned or approved for future development unless some special or unusual circumstance existed. The fact that the MacRae Drive extension was not included in the core plan would therefore not appear unusual. The mere existence of an approved subdivision plan does not, in and of itself, mean that development will occur.

While the Commission sympathizes with Mr. MacDonald now being confronted with a bill for lots he developed some time ago, it is clear from the development permits for the lots in question that he knew of this requirement prior to actual development. Moreover, since there is nothing before us to indicate that the utility in any way misled Mr. MacDonald or improperly applied the rules and regulations of the day, we are unable to find anything other than the utility acted properly and has the right to require payment.

On the issue of the actual costs associated with the sewer extension, we understand that the basis of the cost—before adjustment for grants and the 10% utility contribution—is a letter dated December 15, 1994 from P.S. Hughes of CBCL Limited to Mr. Sentner, the utility's administrator. As we understand it, Mr. Hughes has calculated the pro-rated cost of a larger project at $22,325 for some 300 feet of servicing, including service laterals. This equates to an average cost of $74.42 per foot.

A review of Mr. Hughes' figures indicates that the costs of the extension in question are higher than the average cost of some 3000 feet of other sewer construction carried out during the same period in 1994. An earlier estimate prepared by Mr. Sentner shows a cost of $17,280, some 30% lower than the cost estimate prepared by Mr. Hughes. This equates to an average cost of $57.60 per foot.

Without the benefit of a more detailed estimate and explanation for the higher-than-average cost calculated by Mr. Hughes, the Commission is inclined to accept the average cost calculated by Mr. Sentner. In our view, Mr. Sentner's initial calculation of the costs is a fairer representation of actual costs of servicing typical subdivision lots and should be applied to the formula for calculating the amount payable by Mr. MacDonald.

Capital Costs	$17,280.00
Less Infrastructure grant @ 40%	6,912.00
Net Cost	$10,368.00
Less Utility Contribution @ 10%	1,036.80
Total Developer Cost	$ 9,331.20
Cost assigned to B. MacDonald (50%)	$ 4,665.60

In conclusion, therefore, we find that the utility's actions in this matter were proper and that the amount of $9,331.20 is properly allocated to the developers. Of this, the amount of $4,665.60 is the responsibility of Brian MacDonald.

Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:

Parties to this proceeding seeking a review of the Commission's decision or order in this matter may do so by filing with the Commission, at the earliest date, a written Request for Review, which clearly states the reasons for the review and the nature of the relief sought.