Who should pay $33M to fix South Okanagan community’s failing water system? It’s complicated

There are contradictory views on who should be paying for a $33 million repair to a water system near Penticton, but residents and a local politician think the province should pay the bill.

The Sage Mesa Water System is privately owned and serves 242 properties, and it has fallen into a state of disrepair over the years with complaints from residents and a permanent boil water notice.

The Regional District of Okanagan-Similkameen is preparing for a referendum on April 11 when residents will vote whether the district should buy the system and get a $33 million loan to pay for the needed repairs.

If the loan repayment ends up split among the residents through fees, it would cost each home a total of $136,363.

The confusion surrounds the fact that the Ministry of Water seized management of the water system in 1990, and then contracted out its day-to-day management to the regional district in 2009, even though it’s still technically owned by MK Chapman.

The Ministry of Water said it isn’t responsible for the infrastructure since the system is privately owned.

“The Sage Mesa water utility is privately-owned, and all private water utilities in B.C. are responsible for independently maintaining their infrastructure and ensuring that their ratepayers and communities continue to receive water services,” the ministry said in an email.

But the regional district said it and the owner aren’t responsible either.

“Neither the owner nor the RDOS has any part in planning capital improvements, budget, setting rates, billing, or collecting fees for water on this system,” the regional district wrote in a fact sheet.

Penticton-Summerland’s independent MLA Amelia Boultbee said it should be on the province to pick up the bill.

“The province took it over because it wasn’t being managed appropriately. And then the province subsequently also didn’t manage it appropriately, leading to where we are today, with the constituents stuck in the middle,” Boultbee told iNFOnews.ca. “This is just a deflection because they don’t want to have to come up with the money.”

The independent MLA said Sage Mesa is a unique circumstance compared to the other 121 privately owned water utilities in B.C.

“The province is the one that’s been dropping the ball here for 36 years,” she said.

The ministry said that public money can’t go to a privately owned utility, so until the regional district or another local government acquires the Sage Mesa water system the money can’t come from the province.

“If a water system becomes public infrastructure, such as a local government or regional district owning the system, then public monies can go towards the system such as grants and funding opportunities through governments,” the ministry said.

The regional district ought to acquire the system so it can get help to cover the costs of the repairs, according to the ministry.

“We support the Regional District of Okanagan-Similkameen in their continued efforts to acquire the privately-owned Sage Mesa water system, so they can apply for grant funding and resolve longstanding water servicing challenges in the community,” the ministry said.

The local MLA said that previous attempts to connect the area to water systems for Penticton and the Penticton Indian Band haven’t been successful.

Boultbee said she’s going to keep pushing to get the province to pay for the system so residents don’t have to deal with possible rate increases.

“We’ve tried advocacy, we’ve tried negotiation. We’re going to continue to try that. And beyond that, we’re going to make it politically painful until they decide that the political pain costs more than it would to come and fix this system,” she said.