Binding arbitration on sewer service begins between Trail, Rossland, and Warfield

Andrew Bennett
By Andrew Bennett
November 22nd, 2012

An arbitrator has been selected by BC’s Intergovernmental Relations and Planning Division (IRP) to resolve the sanitary sewage dispute that has been dragging on for years between Rossland, Trail, and Warfield over the fair sharing of costs for the existing service—the bulk of the disagreement, however, is between Rossland and Trail.

Rossland mayor discusses the background

An interview with Rossland’s mayor, Greg Granstrom, clarified that this dispute is entirely separate from ongoing plans and negotiations to build a new secondary or tertiary regional sewage treatment plant to replace the existing primary treatment facility that was built in 1968.

Currently, liquid wastes from the three cities—plus Rivervale and Oasis—are collected at the Columbia Pollution Control Centre in Trail for primary treatment, and the effluent is discharged to the Columbia River. Provincial regulations require a minimum of secondary treatment, however, so the new system in the regional Liquid Waste Management Plan is coming down the pipe in the next few years, complete with a new agreement between the regional partners.

In the meantime, Trail has long pushed for a new cost-sharing agreement between the three cities on the existing service, Granstrom said.

The original 1968 agreement for the cost-sharing formula was based on a number of considerations, among them population projections, but also the fact that Rossland had plans at the time to build it’s own facility and had costed out that option as a viable alternative.

Granstrom said other decisions were made at the time that continue to influence negotiations, such as siting the treatment plant on the east side of the river as preferred by Trail—so that Rossland and Warfield’s sewage has to pipe across the bridge—rather than the west side that would have put the bridge pipe infrastructure in Trail’s court. Now that bridge has reached the end of it’s life, and the pipe sprang a major leak this spring, the capital investment required adds complications to the negotiations.

Perhaps the central issue, however, is that actual populations have in fact decreased by 25 per cent overall since 1968, rather than the 50 per cent increase that was projected. Trail has 44 per cent of the population that was projected in 1968, while Warfield is at 57 per cent and Rossland is at 65 per cent. The imbalance prompted Trail’s call for a service review.

Rossland, however, has maintained that “nothing has changed.” Indeed, Rossland’s population is much the same today as it was in 1968 and, with Rossland’s changeover to water meters and other water conservation measures, its per capita water use (an indirect but commonly used measure of sewer use) has dropped significantly.

Failed mediation

A stalemate over how the costs are to be shared led to mediation, which failed and culminated in the chair of the RDKB, Larry Gray, calling on the Minister of Community, then Ida Chong, to send the issue to binding arbitration. We reported on Rossland council’s reaction to this announcement in May.

The mediator, George Paul of Community Solutions Inc., argued that Trail pays more than its fair share under the present cost system. Paul concluded that a central issue was “trust and respect amongst the participants,” and so binding arbitration would be required.

“That is not to minimize the financial impact on Rossland and Warfield of any change,” he wrote, “but to illustrate that resolution of this issue is not just about the financial impact upon the parties.”

“Sometimes it looks like we’re not cooperating,” Granstrom said. “It’s so far from the truth, it’s unbelievable. We try our best to be good neighbours, we really do.”

One of the difficulties around the negotiations, Granstrom explained, is the fact that Rossland’s money is chiefly funded by residential taxpayers, while about half of Trail’s money comes from Teck’s taxes. “That’s not a whine, it’s a fact,” he said, and it makes him more careful about how the money gets spent.

“So when someone says they want to change a legal contract, we say, ‘Okay, why?’ If it’s just that someone feels like they’re paying too much, we say, ‘Hold on: we’ve got a legal contract.’ But, in the spirit of cooperation,” he said, “we’re willing to move a bit here, so we can move this whole process forward.”

Granstrom said that during mediation, Rossland agreed to a new formula on the operations portion of the sewage budget that would have saved Trail $57,000 to $60,000 per year, but Trail rejected the option.

“When the person we’re trying to negotiate with says, ‘No, we want the full enchilada, we won’t negotiate, here’s our edict, take it or leave it.’ Then there’s no negotiating,” Granstrom said.

Arbitration moves ahead

Lois-Leah Goodwin, the executive director of BC’s Intergovernmental Relations and Planning Division (IRP), wrote to the three mayors and the RDKB chair on Aug. 13 with a list of potential arbitrators established by the Ministry of Community, Sport and Cultural Development (within which IRP functions) in consultation with the Union of British Columbia Municipalities. She gave the mayors and RDKB chair four weeks to make a selection.

In a letter on Oct. 10—received by Rossland on Oct. 15, and released publicly in the Nov. 12 regular council meeting agenda package—Goodwin wrote, “I received correspondence on Sept. 10, 2012 from the City of Trail and the City of Rossland indicating their preferences for an arbitrator.” Neither Warfield nor the RDKB submitted a preference.

“Rossland and Trail put forward two different individuals for consideration,” she wrote, “resulting in no agreement on the matter.” Consequently, Goodwin made the selection and picked Gerald Ghikas QC (Queen’s Counsel), a lawyer from Vancouver with a background in complex domestic and international commercial litigation.

Goodwin’s letter said that Ghikas will have already convened a preliminary meeting to identify the disputed issues, discuss the arbitration procedure, and set deadlines for action.

Unless Ghikas and the parties agree to a different structure, the costs of the arbitration will be shared proportionately between the three cities based on the value of land and improvements within their jurisdiction.

Fundamentally, Granstrom thinks “we’re wasting money” negotiating on the old service, when the new service will soon replace it. He’s pleased that this arbitration is not holding up the process for the new service, but he was not able to comment further on the state of the arbitration.

Granstrom did say that the option to negotiate a compromise remains open now, and even for 60 days after arbitration concludes: “We’re open to that,” he said.

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