Board structure review coming as PUC faces $1 billion in capital costs

Faced with about $1 billion in capital costs in the coming decade, the Chatham-Kent Public Utilities Commission is looking to up its governance game.

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Mayor Darrin Canniff, who serves on the PUC board along with a representative from the six wards, made a motion at the Oct. 17 PUC meeting to recommend council direct administration to look at hiring a consultant to review the governance structure of the utility.

Noting the governance structure hasn’t been looked at in 25 years, Canniff said, “Especially when you look that we’re going to be spending potentially $1 billion in the next 10 to 15 years we need to make sure that we have best practices with our governance.”

Citing the fact the current commission is understood of all council members, the mayor said, “None of us are experts in water (and) wastewater.

“We really need to ensure there are individuals with expertise sitting (on) the board that know what questions to ask.”

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A rates study report from Watson and Association, presented at last month’s PUC meeting, outlined that the 2025-34 water capital costs, adjusted for inflation, are estimated at $870 million and wastewater capital costs will reach $305 million.

Since rates primarily cover the PUC’s operation, the average annual water bill for a home is expected to rise to $1,156.71 from 604.64 and the average annual wastewater bill is predicted to jump to $1,199.37 from $629.72.

Inflation in recent years was cited as a cause with projects projected to cost $10 million now being estimated at $40 million.

Canniff points to the Entegrus board of directors for the municipal-owned power distribution company as an example of what the PUC board governance could emulate.

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“That’s one of the reasons that board is so successful because there’s a number experts sitting on it,” he said.

Having experts on the PUC can potentially identify some synergies between the utility and the municipality, which are two separate entities, Canniff said.

“We need to have somebody external that knows the best practices” to identify ways to “improve how we ultimately improve service to the public.”

Council approved the motion to have administration put out a tender to hire a consultant firm to look at the PUC structure.

Wallaceburg Coun. Carmen McGregor, who serves as commission chair, said now is a good time to look at the PUC governance structure especially with the anticipated increase in need for housing in the municipality.

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“I know council will always be involved and council will inevitably still have final decisions, because it still comes back here,” she said.

Whether a future PUC board will be a mixture of council members and professionals, McGregor said she looks forward to seeing what options come back for a proposed new governance structure.

Chatham Coun. Alysson Storey said, “I appreciate the concern around we’re facing around the PUC, certainly those numbers are quite substantial.”

However, she expressed concern about going forward to hire a consultant without knowing the cost.

Noting a request for proposal hasn’t been issued yet, chief administrative officer Michael Duben estimated the cost for a consultant would be somewhere been $60,000 to $100,000.

He said the contract is being paid for from the PUC water and wastewater reserve.

McGregor said if there is going to be a change in governance and structure for the commission, “probably the ideal time would be. . . after the next set of elections for municipal council.”

She added that will be the time when the next board is appointed to the PUC.

With files from Trevor Terfloth
[email protected]

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