Petrolia may get out of the water business to avoid $25 million in repairs

A post card of the Petrolia Waterwork built in 1896. The town is considering merging with the Lambton Area Water Supply System after 120 years of operating its own water system. Petrolia Heritage Photo

Petrolia may be getting out of the water business.

And Mayor John McCharles says it is all about money.

Petrolia first got into the water business in 1896. Residents were concerned the oil industry was polluting the groundwater and for years advocated building a 38.6-kilometer water line from Bright’s Grove to Petrolia. It took the council of the day three years to approve the $172,000 project that would later prove to be an architectural first.

But the system is aging. Chief Administrative Officer Manny Baron says $25 million in repairs are needed to the system in the next 10 years.

Those repairs, under Ontario law would need to be paid through water rates, and $25 million price tag could drive local water rates up significantly.

So, the town has approached the Lambton Area Water Supply System to see what it would take to become a member and purchase water.

Council held a special meeting April 18, according to minutes approved Monday, to ask LAWSS to hire a consultant to place a price on Petrolia buying in.

Baron and Mayor John McCharles say it is expected the town would not only have to turn over its water assets – the Bright’s Grove plant and its soon-to-be-built new water reservoir system on Confederation Road – to LAWSS but pay cash to become part of LAWSS. McCharles suggested it could be as much as $10 million. However that amount will be determined by an independent consultant if the LAWSS board agrees to explore the idea at its meeting April 28 according to Baron.

“Originally, The Ministry of the Environment owned it (the water system) and they wanted the municipalities to buy it. They (the Lambton municipalities) took out a huge loan out which I think they are done paying maybe this year or next year. All of these municipalities have had to contribute money and money and money, so it is unfair for us to just come in (without a financial contribution)….there is going to be a price of entry, what that is we’ll have to fully explore.”

McCharles says even if the cost is high, it may be a better deal in the long run. “If we’re not going to buy in, then we’re stuck with a $25 million capital asset project,” he says.  “And secondly, I don’t think it makes sense to duplicate systems – we’re duplicating two systems.”

Baron and McCharles expect a consultants report on the cost for Petrolia to buy into the system could be complete by early summer.