‘Worst case scenario’: Sage Mesa homeowners to vote on $33M water system upgrade

It’s official — the 246 property owners connected to the failing Sage Mesa water system will vote in a referendum on Saturday, April 11 to decide whether they support the Regional District of Okanagan-Similkameen (RDOS) taking over the system from the provincial government.

Voters will also be asked whether they approve borrowing just over $33 million to replace and upgrade the system.

The $33-million figure is a “worst-case scenario” used when municipalities apply for major infrastructure loans through the Municipal Financing Authority (MFA). The expected actual cost is between $16 and $18 million, said RDOS Area F director Riley Gettens at last Thursday’s meeting.

In early 2024, an engineering report concluded the Sage Mesa system was failing and nearing end of life. Frequent breakdowns led to ongoing boil-water advisories. Although the province operated the system for more than 35 years before transferring management to the RDOS, it has not committed funding.

This has angered homeowners who argue they shouldn’t have to pay for deterioration that occurred under provincial oversight.

Gettens said it has become clear the province won’t provide direct funding, though several multimillion-dollar grants remain available. To qualify for those grants, residents must first approve RDOS ownership and borrowing.

The RDOS board passed the final reading of the loan authorization bylaw Thursday, confirming the April referendum. The board also appointed RDOS director/corporate officer Tracey Batten as chief election officer. It will take six to eight weeks for the province to recognize the bylaw, after which the RDOS can begin promoting the referendum. One advance polling day will be offered.

The RDOS negotiated a longer repayment term with the MFA — extended from five to 12 years. If the full $33 million were borrowed, property owners would pay roughly $1,200 per month, a cost many say they cannot afford. If the district secures a $7-million grant and costs stay in the $16-$18 million range, payments would drop significantly, Gettens said.

She stressed the $33-million estimate came from the engineering report, not RDOS staff. Phase one of the work, costing about $10 million, includes upgrading the distribution system, improving hydrants for fire protection, and replacing the reservoir. “We’re not even talking about sourcing new water until that’s done,” she said.

Phase two is projected at $6.2 to $8.3 million, depending on the long-term water source. The two leading options are connecting to Penticton’s water system or building a standalone treatment system, which Gettens said is the least preferred.

The board recently approved $56,000 for a feasibility study on a jointly owned treatment plant with the Penticton Indian Band. If viable, the proposal will continue, though Gettens warned residents likely won’t have a final answer before voting day.

She also warned that a “no” vote won’t prevent major costs. If the referendum fails, the province’s Comptroller of Water Rights is expected to impose significant rate increases to fund phase one. When she asked for projected rates, he declined to provide them. “I find that frustrating,” she said.

MLAs Amelia Boultbee (Penticton–Summerland) and Donegal Wilson (Boundary-Similkameen) have offered support in gathering information as the referendum approaches. RDOS chief administrative officer Jim Zaffino noted that residents may seek independent legal advice regarding potential action against the province.

More than 200 people attended an October 30 town hall at West Bench Elementary School. Gettens said she initially believed the province would offer substantial funding but, after multiple meetings, it’s clear no direct support is coming.

The RDOS has applied for three separate $7-million grants for 2026, including one for Sage Mesa. Provincial staff have said grant approvals depend heavily on ownership, and because the province currently owns the system, it is considered high-risk.

“Holding the referendum first improves our chances of securing funding,” said RDOS CAO Jim Zaffino. Grant opportunities of this size are rare, Gettens added, and missing this round could mean waiting years.

Regardless of the vote, construction to replace the failing system is expected to begin next spring or summer.

“The province has shown it isn’t interested or capable of running rural water systems,” Gettens said. “If you stay with the province, you fund it yourself upfront.”

— This story was originally published by the Penticton Herald