falk report on the bio-digester (3,327 kb)

8/10/2019 Falk Report on the Bio-Digester (3,327 KB)

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Chatsworth / Georgian Bluffs Bio-Digester

Standing Back to See the Big Picture

January 12, 2015

Introduction

The jointly-owned Chatsworth / Georgian Bluffs Bio-Digester is entering its fifth year of operation. From

the very beginning, it has fallen far short of expectations in terms of both performance and costs.

I want to be perfectly clear from the outset that I have no reason to believe that any representative of

Chatsworth involved in decisions leading to the construction of the Bio-Digester was not acting in good

faith at the time. I believe everyone was attempting to make good decisions on behalf of residents and

taxpayers. Good decisions, however, require more than good faith and good intentions.

I have attended most Joint Management Committee/Board meetings in the last 2 years, during which

time I have also made presentations to the Chatsworth Council. I have occasionally written letters to the

Sun Times and open letters to Mayor Pringle that were published on the OS Hub website. In September,

to begin to address the major problem of little or no information from the Chatsworth Council (not just

about the Bio-Digester), I started a blog which is athttp://shininglightonchatsworth.wordpress.com .

My letters, presentations, questions at meetings and the fact that I started this blog have been

interpreted by some as indicating that I am opposed to the Bio-Digester. This is not correct; I supporttheconcept, but with reservations.

My concerns and questions have to do with whether or not the Bio-Digester is in fact the best way for

Chatsworth to deal with septage even after spending as much as we have on it, whether it is capable of

doing what is being claimed at an affordable cost, how it is being managed, the serious lack of openness,

the tendency to spin information about it, and the fact that Chatsworth taxpayers subsidise sewage

disposal on the Sunset Strip through provisions of the Bio-Digester Agreement.

My independent research raised many questions that were not answered, only partially answered, or

answered in a way that begged more questions. Therefore, I decided (in June 2014) to file a Freedom of

Information request with Chatsworth; after reviewing the documents received, I filed a FOI request with

Georgian Bluffs.

This report is based on my review of the documents made available to me, and my own participation

and research. It provides some history of the project and other information that I believe needs to be

taken into account in decisions about the Bio-Digester, and points in a direction that is likely to be more

favourable for Chatsworth than holding more-or-less to the present course.
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About the Appendices

As time permitted during my review of the documents (which I went through mainly in chronological

order), I posted links to most of them on my blog, along with some comments.

Appendices A through F are copied from my blog. I am attaching these rather than simply providing linksto the blog so that this report is self-standing.

The Appendices contain many other links to original documents, however. I urge readers to follow as

many of these links as possible because the original documents may contain information that I have

misunderstood, or information on subjects that I have not picked up on.

Decision to Build the Bio-Digester

In 2003, Grey County engaged a consultant (Henderson Paddon and Associates Limited) to examineseptage management in its member municipalities. The resulting report titledSeptage Management

Plan for the Municipalities of Grey Countyis dated March 12, 2004. [See Appendix A for more

information and to read my blog comments made on October 10 and October 11.]

My research leads me to conclude that this initiative seems to have been in response to a discussion in

mid-2003 between County representatives and then Minister of the Environment Mr. C. Stockwell who

apparently spoke about the possibility of banning the practise of spreading septage on approved fields.

Later that year, the Conservative government of then Premier Ernie Eves was defeated in the provincial

election. There is no evidence that the next (Liberal) Minister of the Environment, or any subsequent

Liberal Minister of the Environment, had the same views or priorities as Mr. Stockwell. The only thing I

could find about possible changes in the law was a Policy Statement about septage published by the

Ministry of the Environment in 2005; it is summarized inthis July 2007 Fact Sheet.[See Appendix A

October 27]

The 2004 consultants report considered and evaluated a number of alternatives, but nothing came of

its recommendations. It is important to understand that building and operating one or more Bio-

Digesters was not among the alternatives considered.

In June 2006, the same consultant produced a report titledAnaerobic Treatment of Septage/Biosolids to

Produce Biogas, Electrical Power and Treated Biosolids.This report refers to an engagement by

Chatsworth and Georgian Bluffs, and speaks in definitive terms about possible changes in the law or

regulations ( disposal of septage will be discontinued and that all septage will need to be treated ).

[Appendix AOctober 12]

Neither Chatsworth nor Georgian Bluffs provided any contract or letter of engagement with Henderson

Paddon and Associates Limited, so I assume there wasnt one. CAO/Clerk Moore told me that the first

reference to a Bio-Digester is contained in theminutes of a meeting of Chatsworth Council held on
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December 27, 2006. Motion 344/2006 in these minutes states that Chatsworthsshare (50%) of the

costs for a Bio-Digester should be paid from the Federal Gas Tax money. [Appendix A November 15]

Since this is the first reference to a Bio-Digester in the Chatsworth minutes, and since Chatsworth

Council authorized paying half of a consultants invoice for work on a Bio-Digester, I think it is

reasonable to conclude that three important decisions had been made by December 2006, and thatthese decisions were made somewhere other than at the Chatsworth Council table. The three decisions

were:

Build a Bio-Digester;

Engage a consultant; and

Do so in partnership with the Township of Georgian Bluffs.

It is important, also, to understand thatthere is no evidence that these decisions were made in the light

of any study or analyses of what might be best for the residents of Chatsworth. There are other options

for treating septage in Ontario. [Appendix AOctober 27]

The Bio-Digester is not mentioned in minutes of the Chatsworth Council in 2007 even though there is

documentation of regular payments being made that year. Theminutes of the Chatsworth Council

meeting on January 2, 2008(Motion 4/2008) deal with the costs incurred during 2007 in the same way

as for those incurred during 2006.

A number of activities took place in 2007 and 2008 regarding design of the Bio-Digester, and funding

from the Provincial and/or Federal governments [Appendix AOctober 13 and 14]. Clearly, a decision

had been made to proceed if and when funding could be found; again, there is no evidence that this

decision was made at the Chatsworth Council table.

Sometime in early 2009, the parties learned that funding would be available under the Build Canada

program [Appendix ANovember 14 and 19]. At that point, a need arose to demonstrate that

alternatives had been considered. Also, Build Canada required a Business Plan.

TheBuild Canada grant applicationwithsupporting documentsis dated May 6, 2009. The covering letter

makes reference to the April 2009Business Plantitled Anaerobic Treatment of Septage/Biosolids/Corn

Stover to Produce Biogas, Electrical Power and Treated Biosolids, and toTables 1, 2, 3 and 4.

My understanding of Section 3 (Analysis of Options) of the Business Plan is that it contains an apples to

oranges comparison. Specifically, Section 3 compares the up-to-date cost of two options from the Grey

County study in 2004 that weresized to deal with all of the septage from the nine municipalities in Grey

Countywith a Bio-Digester sized to deal with only the septage from Chatsworth and Georgian Bluffs. I

truly hope this understanding is wrong, but I dont think it is. [Appendix ANovember 13]

In summary, the documentation points to the Bio-Digester being decided first (in 2006) with an attempt

to justify it later (2009). There is no evidence to indicate that a Bio-Digester was compared to other ways

of dealing with septage in Chatsworth and Georgian Bluffs, together or separately. There is no study
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concluding that a Bio-Digester would be the best (or even a good) option for Chatsworth, considering

factors such as technology, costs, environmental considerations, social aspects and other such criteria

that are normally used to evaluate proposals and alternatives.

Public Information and Involvement

By September 25, 2009 when thenotice of public meetingwas published, taxpayers and residents of

Chatsworth had been told nothingabout the Bio-Digester, even though:

Chatsworth Council had authorized payments to the consultant sincesometime in 2006

(apparently without anything in the way of a formal agreement);

a decision had been made to build a Bio-Digester in partnership with Georgian Bluffs without

considering alternatives either to the Bio-Digester or to the partnership;

the design was more-or-less complete;

an application for partial funding from both Canada and Ontario had been submitted and

approved;

a schedulehad been prepared; and

tender documents were ready to send to contractors.

This project summaryinformation was probably distributed at the public meeting on October 1, 2009

that was held in Keady. It represents the onlyattempt that has ever been made to pro-actively inform

taxpayers and residents about the Bio-Digester. [Appendix ANovember 25]

In summary, there was no public information and no opportunity for public input at anystage of the

project. Regrettably, there has been no meaningful public information provided since then, either.

When drawing conclusions or making criticisms of decisions and activities in hindsight, it is possible to

fall into the trap of applying todays standardsto earlier decisions. I wanted to be realistic in my claims

that Chatsworth should have provided information that citizens have a right to know and that the

Council had an obligation to provide.

Therefore, I searched for something in the way of standards or best practises from around 2006 which

led led me toA Guide to Service Delivery Review for Municipal Managerspublished by the Ministry of

Municipal Affairs and Housing in 2004.

This Guide was created to help municipal managers in ongoing efforts to improve service delivery by

providing better customer service and operating more efficiently, and to improve expenditure

management by setting goals and priorities, managing demand and evaluating performance. It speaks in

many places about the need for communication with citizens, and for public input.

Indeed, according to the Municipal Act, it is an absolute necessity for Council to carry on the publics

business in public.
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Because this Guide was published in 2004, two years before a decision was made to build the Bio-

Digester and six years before it was built, I feel safe in saying that Chatsworth fell far short of what were

then best practises regarding public information and involvement.

The operation of the Bio-Digester falls into the category of services being provided. I trust that

Chatsworth Council and Administration will consider points and methods outlined in this Guide whenconsidering the results of the objective engineering report on the Bio-Digester that Council has initiated.

Agreements

At the Chatsworth Council meeting on June 17, 2009, Motion 155/2009 was passed. According to the

minutes of that meeting,this motion states:

5. Georgian Bluffs and Chatsworth agree to finalize an agreement on the construction,

invoicing, project management, acceptance, maintenance and operation of the Bio-Digester,including revenue sharing, based on the principle that both Townships share equally in the risk

and/or rewardfrom the Bio-Digester Facility.

6. That the CAO/Clerk Administrators bring back an agreement for execution by the Councils of

the Townships.

On this basis: funding was arranged; contracts were signed; construction was started and essentially

completed; bills were paid; and operation began.

TheAgreementwas brought to the Chatsworth Council table at a meeting on February 2, 2011, by which

time the Bio-Digester was just beginning full operation. AMemorandum of Understandingwas broughtto the same meeting that has to do with landfill. Both of these documents were approved at that

meeting by ChatsworthBy-Law No. 2011-9.[Appendix BSeptember 18]

The Memorandum of Understanding makes Chatsworths 50% participation in the Bio-Digester

conditional on providing landfill space for Georgian Bluffs:

NOW THEREFORE be it resolved that in return for 50% ownership of the Bio-Digester facility the

Township of Chatsworth will accept the solid waste produced by the Bio-Digester at one of their

landfills.(my emphasis by underlining)

AND FURTHER the Township of Chatsworth and the Township of Georgian Bluffs agree to enterinto a contract, subject to final details, to accept all of part of Georgian Bluffs residual solid

waste in the event the Georgian Bluffs landfill reaches capacity or must close due to Ministry of

Environment requirements or order such contract to accept Georgian Bluffs solid waste to

provide for the following

None of the documents from 2006, 2007, 2008, 2009 or 2010 mention landfill.
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In response to my FOI requests to both townships, no documents were provided pertaining to any

meetings or correspondence between the CAO/Clerk Administrators about the Agreement and

Memorandum of Understanding. Chatsworth provided justone document(undated) about landfill.

There is no evidence that the Chatsworth Council provided any direction to the CAO/Clerk about an

Agreement in addition to the above-noted resolution on June 17, 2009. There is no evidence of anyconsideration of landfill by the Chatsworth Council either before this resolution or afterwards.

Therefore, it remains an important question as to how Chatsworths partnership on the Bio-Digester

that had been agreed in 2006 became conditional five years later on Chatsworth providing landfill space.

There are recent indications that the link to landfill is very important to Georgian Bluffs. I make this

statement in light of an exchange between a resident of Georgian Bluffs and Councillor Carol Barfoot at

an All Candidates meeting in Shallow Lake on September 26, 2014.

In responding to a comment by the resident who noted that the landfill in Hepworth had only four years

of life, Councillor Barfoot said something along the lines of The Agreement with Chatsworth has solvedour landfill problems for 30 years.

If Councillor Barfoots interpretation of the importance of the Agreement is correct, I suspect that she

might well have added and it has solved our problems very cheaply, too.

This is an aspect of the Agreement that the Chatsworth Council needs to re-visit.

As far as I have been able to determine, and consistent with the fact that the decision to build the Bio-

Digester was not made by Council, it does not appear that the Council was involved in a meaningful way

with the decision to bundle the Bio-Digester with landfill. No studies were evidently done on this.

Chatsworth residents and taxpayers have neverbeen informed, except by me, that the arrangements

with Georgian Bluffs regarding the Bio-Digester also involved providing landfill space.
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Performance - Costs

Obviously, cost is an important measure of performance. The graph below provides big picture results

from the beginning of operation of the Bio-Digester in early 2011 to the end of 2014.

Chatsworth is responsible for half of all of the figures shown in the graph and contained in the tablesthat follow in this section.

Bio-Digester Cumulative Financial Results (2011 through 2014)

Notes: 1) Figures for the first year of operation were not audited.

2) Figures for 2012 and 2013 are from Audit Reports.

3) Figures for 2014 are taken from the Agenda package for the January 9, 2015 meeting (which

stated that some of the actual data for the month of December require adjustments).

A few more big picture cost-related items are provided in the following tables. Forecast amounts are

taken from Schedule C(Tables C-1, C-2 and C-3) of the Agreement which, in turn, are the same as

Tables 5, 6 and 7 in thefinal Design Brief dated February 2010.[Appendix ANovember 19]

In the graph above and in the tables below, I have reduced the annual forecasts for 2011 by one-twelfth

to reflect the fact that the Bio-Digester was not fully in-service until mid-January 2011; this is not precise

-$1,000,000

-$500,000

$0

$500,000

$1,000,000

$1,500,000

2010 2011 2012 2013 2014

FORECAST (PROFITS)

ACTUAL RESULTS (LOSSES)
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but it is close enough for this purpose. Some of the other figures in the following tables have been

computed by me from the Audit Reports and from detailed reports tabled at meetings of the Joint

Management Board.

Chatsworth residents and the Chatsworth Council have neverbeen provided with big picture

information about the financial situation such as contained in the preceding graph and the followingtables.

Bio-Digester Income from Operation

YearForecast Tipping

Fees (all sources)

Actual Tipping

Fees (all sources)

Forecast Hydro

Revenue

Actual Hydro

Revenue

2011 $372,653 $111,541 $117,333 $59,558

2012 $406,531 $130,267 $128,000 $81,785

2013 $406,531 $117,540 $128,000 $68,987

2014 $406,531 $145,872 $128,000 $56,564

Mayor Pringle has used the broken promise by the province explanation for the actual income from

tipping fees being so much less than the forecast. There is no evidence whatsoever that any Minister in

the Liberal government (elected in October 2003) ever made any such promise. [Appendix C]

Bio-Digester Annual Operating Costs (Excluding Capital)

YearForecast Cost

(from Agreement)Actual Cost

2011 $194,545 $310,1942012 $212,231 $502,948

2013 $212,231 $416,492

2014 $212,231 $338,582

The actual cost figures in this table do not include capital even though the forecast annual cost of

$212,231 includes an allowance of $50,000 that is titled Reserve fund for Upgrading of Facility in 20

Years.

In the end, of course, taxpayers have to pick up the bill whether expenditures are classified as capital oroperational, but I have tried to take capital out of the operating costs so I can make valid calculations for

the actual costs of operating a sewage treatment plant (next table).

Again, and to be clear, Chatsworth was responsible for 50% of the actual costs in the preceding table.


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Sewage and Septage Processed, and Unit Costs

Year

Forecast Volume

from Agreement

(cu. metres)

Actual Volume

(cu. metres)

Forecast Unit Cost

($ per cu. metre)

Actual Unit Cost

($ per cu. metre)

2011 20,911 n/a $ 9.30 n/a2012 22,812 10,670 $ 9.30 $ 47.14

2013 22,812 8,122 $ 9.30 $ 51.28

2014 22,812 n/a $ 9.30 n/a

The tipping fee for the Sunset Strip was $8.05 per cubic metre over the entire period covered by this

table; the fee for residential septage stood at $25.00 per cubic metre from 2011 through 2013; the fee

was reduced to zero for Chatsworth residents in mid-2014, and other changes seem to be pending.

It is my understanding that municipalities often charge for services on a cost recovery basis. If thiswere the way in which the Bio-Digester were operated, therefore, the actual unit cost incurred would

become the starting point for a discussion and decision at the beginning of each year about setting

appropriate tipping fees for the next year so as to recover some or all of the costs incurred in treating

the septage / sewage.

Note the forecast unit cost ($9.30 for all septage including from the Sunset Strip) in light of the $35.00

per cubic metre tipping fee assumed in the June 2006 Report [Appendix AOctober 12] and the $45.00

per cubic metre fee assumed in the Revised Estimates 2008 Report [Appendix A October 14]. The

difference between these assumed tipping fees and the forecast cost of $9.30 per cubic metre is the

primary reason that the Bio-Digester was forecast to pay for itself within a relatively short period of

time.

On October 23, 2013 I madethis presentationto the Chatsworth Council on subsidies to the Sunset

Strip. Some Georgian Bluffs Councillors and staff were in attendance. The subject is also covered in my

blog, so I will not repeat that information here, except to state that the presentation concluded that the

subsidies by Chatsworth have amounted to about $100,000 per year since the Bio-Digester came into

service, for a total of $400,000. [Appendix D]

It is difficult for anyone to determine volumes processed from figures normally available at Bio-Digester

meetings; this is why I have not provided actual volumes for 2011 and 2014. In May 2014, however,

information was tabled at a joint meeting of the Chatsworth and Georgian Bluffs councils that providedtotal volumes and residential volumes for 2012 and 2013.

The May 2014 document said that, in 2012, residential septic tanks provided 4% of the actual 10,670

cubic metres, or 427 cubic metres; in 2013, the residential volume was 3% or 244 cubic metres. These

figures are for Chatsworth and Georgian Bluffs combined.
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Since an average septic tank is about 5 cubic metres, this means that about 85 residential septic tanks

were processed in 2012 and about 49 were processed in 2013, for a total of 134 from both townships

over these two years. There are roughly 2,900 septic tanks in Chatsworth and 4,900 in Georgian Bluffs.

Applying this ratio to the number of residential septic tanks treated leads to the conclusion that about

50 Chatsworth residents directed their septage to the Bio-Digester over the years 2012 and 2013.

From the preceding table, the operating costs for 2012 and 2013 were $919,440, half of which (about

$460,000) was paid by Chatsworth. Therefore, the actual benefitto Chatsworth over these two years

was to receive and process about 50 septic tanks. The average cost was $9,200 each, which amounts to

$1,840 per cubic metre.

The solution to the problem of high operating costs ($/cubic metre) is far more complex than increasing

the volume of septage delivered to the Bio-Digester, especially by making it mandatory for the Bio-

Digester to be used (as was under consider in July 2014).

The reason for this is that Bio-Digester is not capable, as it stands, of handling a steady stream of trucks.

An unknown amount of additional money is needed before this is possible.

PerformanceTechnical Aspects

I am not qualified to say much about the technical aspects of the Bio-Digester. I simply note that the

minutes of the Joint Committee in the first two years of operation (2011and2012)indicate a litany of

technical and practical problems that seemed to go beyond start-up issues that would normally be

expected, and that cost a great deal of money.

There are three reports about deficiencies, all of which were produced by the same consulting company.

The reports contain statements to the effect that some problems were anticipated but could not be

addressed in the design because of cost limitations. Needless to say, information such as this has not

been revealed voluntarily by Chatsworth.

Themost recent reportis dated December 4, 2014; it does not include information about costs to fix

these deficiencies, individually or in total. [Appendix ADecember 29]

In June, 2014 I recommended that the Chatsworth Council engage an independent consultant to provide

a report on the deficiencies. The Council has taken steps towards this end, but I do not know where this

stands at the moment. [Appendix E]
http://shininglightonchatsworth.wordpress.com/joint-meetings-2011/http://shininglightonchatsworth.wordpress.com/joint-meetings-2011/http://shininglightonchatsworth.wordpress.com/joint-meetings-2011/http://shininglightonchatsworth.wordpress.com/joint-meetings-in-2012/http://shininglightonchatsworth.wordpress.com/joint-meetings-in-2012/http://shininglightonchatsworth.wordpress.com/joint-meetings-in-2012/https://www.scribd.com/doc/250586770/Engineering-Report-on-Deficiencies-and-Changes-Required-as-at-Nov-2014https://www.scribd.com/doc/250586770/Engineering-Report-on-Deficiencies-and-Changes-Required-as-at-Nov-2014https://www.scribd.com/doc/250586770/Engineering-Report-on-Deficiencies-and-Changes-Required-as-at-Nov-2014https://www.scribd.com/doc/250586770/Engineering-Report-on-Deficiencies-and-Changes-Required-as-at-Nov-2014http://shininglightonchatsworth.wordpress.com/joint-meetings-in-2012/http://shininglightonchatsworth.wordpress.com/joint-meetings-2011/


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Transparency and Openness

This is related to, but different from public information discussed earlier in this report.

In the past, the Chatsworth Council and Administration have talked about transparency and openness,

but my involvement related to the Bio-Digester has led me to conclude that, for whatever reason, thereis little in the way of substance to this talk.

Providing a full Agenda package prior to Council meetings was a major step forward, and I commend the

Council and Administration for that. But more, much more, needs to be done.

For example, we seem to be entering a period of time that will see upward pressures on tax rates that

will necessitate reviews of services. There may need to be combinations of increased costs, reduced

services and, possibly, innovations involving cooperation with other municipalities or the private sector.

I am of the view that taxpayers deserve respect, and will respond positively to genuine efforts to inform

and involve them about such problems. TheGuide from the Ministry of Municipal Affairs and Housingreferred to earlier in this report speaks to this in many places. There is no magic bullet, though.

Moving from generalities to specifics, there is an opportunity now to take a different approach with

regard to the Bio-Digester. Council should demand simple and clear cost and performance information

(such as but not necessarily the same as that contained in this report).

In my view, explanations along the lines of it has to be this way because thats the way it is that I have

heard at meetings cannot be accepted; if Councillors or Chatsworth representatives on the Joint Board

dont understand something, then they have a responsibility to say so, and insist that information be

provided in a way that they believe can be understood by residents.

There is no valid reason for a record-keeping system to dictate the form and content of reports which

are then unintelligible to average citizens. For example, it is astonishing that someone cannot download

a copy of anAudit Reportfor any year and be able to quickly find audited figures showing how much the

Bio-Digester cost in that year. But it is impossible to do that; this is simply not acceptable. [Appendix F]

On this point, Mr. Henry Feenstra was one of the first people to rise at the All Candidates meeting in

Williamsford on October 2, 2014. After stating that he had heard a number of cost figures floating

around, Mr. Feenstra asked Mayor Pringle: What has the Bio-Digester actually cost Chatsworth? To

me, the fact that a respected, intelligent taxpayer needed to ask a simple question like that indicates

that something is seriously wrong.

I was seated in about the fifth or sixth row, and wrote down Mayor Pringles answers as follows: 2011

$191,000; 2012$310,000; and 2012$324,000. To the best of my knowledge, this is the first time

that the costs of the Bio-Digester have been spoken about openly in public.

That said, however, it is on point to note that these figures are not the same as the ones in the

Provincial Financial Information Reporting system (the official numbers that the Province requires
https://www.scribd.com/doc/240958396/Service-Delivery-Review-Ministry-of-Housing-August-2004https://www.scribd.com/doc/240958396/Service-Delivery-Review-Ministry-of-Housing-August-2004https://www.scribd.com/doc/240958396/Service-Delivery-Review-Ministry-of-Housing-August-2004http://www.chatsworth.ca/content/financial-statementshttp://www.chatsworth.ca/content/financial-statementshttp://www.chatsworth.ca/content/financial-statementshttp://www.chatsworth.ca/content/financial-statementshttps://www.scribd.com/doc/240958396/Service-Delivery-Review-Ministry-of-Housing-August-2004


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every municipality to file). The FIR numbers at line 0898 on Schedule 40 (Consolidated Statement of

Operations: Expenses) are as follows:2011$305,094;2012$381,196;and2012$307,737.

The Mayor did some rounding, which is fine, but setting that aside, there are material differences

between his answers to Mr. Feenstra and the FIR numbers. Why?

For Agenda Package for the inaugural meeting of this Council on December 3, 2014 contained an

excellenttwo-part article.I sincerely hope that this was not simply noted and filed as so many of us

tend to do when more immediate events and issues demand our attention.

I have not had an opportunity to observe a normal work day in the Chatsworth office, but it is

possible, even likely, that openness and transparency asa guiding principlerather than some kind of

afterthought like it now appears to be cannot be achieved without additional resources.

I can only speak for myself, of course, but as long as I can be assured that there is minimal waste and

inefficiency, the thought of increased costs for this purpose doesnt trouble me.

In summary, it is both a legal responsibility and moral responsibility for the Chatsworth Council and

Administration to conduct public business in full public view. This is not happening at present.

Management Issues

The preceding sections of this report identify some issues that need to be pursued by the Council.

First:Because there was never any study of alternative ways of treating septage (either independently

or in partnership), there is no evidence on which to base an assumption that the Bio-Digester represents

the best option for the future. The facts that it exists and is operating cannot be ignored, however.

Considering actual results in the first four years of operation, it is clear that continuing along the same

path without significant changes is not sustainable; this is the big picture fact behind the meeting of

both councils on May 28, 1914 and some of the information contained in the Agenda Package for the

January 9, 2015 Joint Board meeting (that was cancelled). That is to say, major changes are required to

the financial foundation; the elephant in the room can no longer be ignored.

Some of the required changes should not, perhaps cannot, be carried out without changes to the

February 2, 2011 Agreement which never did and certainly does not now reflect financial reality.

Therefore, I believe that the Chatsworth Council should provide notice of termination of the Agreement

(Article 6.0) in five years. This should not be seen as an act that is hostile;rather, it is a necessity in

order to protect the interests of Chatsworth going forward. To demonstrate good faith, Chatsworth

should continue to provide its share offunding to keep the Bio-Digester operating, and cooperate with

Georgian Bluffs in present efforts to bring a measure of fairness to the costs. However, it would be a

mistake in my opinion for Chatsworth to agree to provide new capital to attempt to address deficiencies
http://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2011FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2011FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2011FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2011FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2011FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2012FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2012FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2012FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2012FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2012FIRandMPMPReport.pdfhttp://csconramp.mah.gov.on.ca/fir/View/FI134204%20Copy.pdfhttp://csconramp.mah.gov.on.ca/fir/View/FI134204%20Copy.pdfhttp://csconramp.mah.gov.on.ca/fir/View/FI134204%20Copy.pdfhttp://csconramp.mah.gov.on.ca/fir/View/FI134204%20Copy.pdfhttp://csconramp.mah.gov.on.ca/fir/View/FI134204%20Copy.pdfhttps://www.scribd.com/doc/248823167/Municipal-World-Articles-Being-Elected-Part-1-Part-II-350-KBhttps://www.scribd.com/doc/248823167/Municipal-World-Articles-Being-Elected-Part-1-Part-II-350-KBhttps://www.scribd.com/doc/248823167/Municipal-World-Articles-Being-Elected-Part-1-Part-II-350-KBhttps://www.scribd.com/doc/248823167/Municipal-World-Articles-Being-Elected-Part-1-Part-II-350-KBhttp://csconramp.mah.gov.on.ca/fir/View/FI134204%20Copy.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2012FIRandMPMPReport.pdfhttp://www.chatsworth.ca/sites/default/files/files/FIR%20MPMP/2011FIRandMPMPReport.pdf


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that have been identified, at least until such time as it is shown that continued operation is the best or

at least a very good way for Chatsworth to deal with septage.

Chatsworth then needs to get on with the engineering study that has been initiated. If the results of that

study point to the possibility that the Bio-Digester is a viable option, then reasonable projections of its

costs need to be compared to other options; again, no other options were ever considered.

Second:As long as the Bio-Digester remains in operation and under management by the Joint Board, a

way needs to be found for the entire Councilto be involved in decisions. In my observation, the

historical role of the Council in this regard has been something akin to a rubber stamp.This seems to

be at odds with some aspects of By-Law 2012-25 which authorized approval of the September 5, 2012

Agreement that established and governs the operation of the Joint Board. [Appendix B]

A $300,000 per year budget item requires fully informed input from allof our elected representatives,

not just the Mayor and Deputy Mayor at Joint Board meetings. Therefore, Chatsworth needs to

implement some means by which the entire Council can be informed about the Bio-Digester and related

issues. For example, there could be an information report tabled with Council after each Joint Board

meeting by which key issues are identified in advance and direction sought. By comparison, the Council

is routinely provided with far less information about the Bio-Digester than about the Wind Turbine

Committee or Conservation Authorities.

Lack of information can be damaging to the interests of the Township of Chatsworth. For example, the

three Chatsworth Councillors who attended the joint council meeting on May 28, 2014 had very little

background upon which to draw to ask questions and respond to what was said by others. It was

obvious that they had not been briefed, and were pretty much at sea.

I hasten to say that I am not pointing fingers; I am just pointing to a problem that needs to be fixed.

Third:Chatsworth residents and taxpayers need to be provided with full information about possible

impacts of the landfill aspects of the Agreement in the event that Georgian Bluffs initiates plans to

exercise this provision of the Bio-Digester Agreement.

Considering the huge differences between the actual results and the it will pay for itself in 7 years

scenario painted when the Bio-Digester was first announced, there is an understandable measure of

skepticism about the benefits to Chatsworth of the landfill aspects of the Agreement.

It is possible, of course, that Georgian Bluffs will not need or wish to exercise this provision. It is also

possible that accepting garbage from Georgian Bluffs for 30 years (as Councillor Barfoot described) willbe manageable and beneficial to Chatsworth. But if this is even remotely possible, then the Chatsworth

Council needs to initiate discussions with Georgian Bluffs, the Ministry of the Environment, other

agencies and the publicin order to figure it out.

Respectfully submitted,

Trevor E. Falk


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2 | P a g e A p p e n d i x A F O I R e q u e s t s

It will probably take me a couple of weeks to do this. By the end, people who follow just the

commentary should have a reasonable understanding of the story of the biodigester without getting too

deep into the swamp, so to speak. Anyone who is inclined to delve deeper into any subject, or any

particular document, will be able to do so if they wish.

October 9, 2014FOI Request to Georgian Bluffs

The sewage lagoon is integral to the biodigester project and the Agreement between Chatsworth and

Georgian Bluffs. Chatsworth has one-half interest in the lagoon. It is claimed that the subsidies that

Chatsworth pays (half of the transportation and roughly one-third of the tipping fees for every drop of

septage generated by most businesses on the Sunset Strip) are somehow justified based on the original

financing of the lagoon, but there has never been a coherent explanation of this.

In the circumstances, I thought that Chatsworth would have at least some information about the lagoon,

but apparently not (see point 7 in Mr. Moores Sept 30 letter, below). This strikes me as very odd, but in

any event, the importance of the lagoon and the lack of any information from Chatsworth about it

caused me to file a Freedom of Information request with Georgian Bluffs on October 7, 2014 (click here

to see it).

October 10, 2014Chronological List of Documents provided by Township of Chatsworth to FOI

Request

A list of documents provided in response to my June 11, 2014 FOI request may be foundhere.This is

(roughly) the order that I will post them with some commentary, starting later today.

October 10, 2014Document #1:Septage Management Plan for the Municipalities of Grey County

prepared by Henderson Paddon and Associates Limited (March 12, 2004).

First, note that the Figures and Tables were not provided by Mr. Moore in response to my FOI request.

In April, 2013 I found this report on theGrey County website,but it seems to have been removed since

then. I will post the tables, figures and appendices at a later date.

Section 1.1of this report refers to a meeting of Grey County representatives with the Minister of the

Environment in February 2003. Although not named, the Minister at that time was Mr. C. Stockwell who

was at the same time the Minister of Energy in the government of then Premier Ernie Eves. The report

states: It was made clear by the Minister to the delegation that they were considering banning the

application of septage from the land in future and that this issue should be resolved.

A meeting in June 2003 with officials of the Ministry (not the Minister) apparently discussed the

possibility of a Pilot Project in Grey County. The Ministry officials apparently discussed certain

conditions that would have to be met, in particular that all nine municipalities in the County would

participate. From the Provinces perspective, I can understand why this would be important (scale and

practicality).
https://www.scribd.com/doc/242395541/Oct-7-2014-FOI-Request-to-Georgian-Bluffshttps://www.scribd.com/doc/242395541/Oct-7-2014-FOI-Request-to-Georgian-Bluffshttps://www.scribd.com/doc/242395541/Oct-7-2014-FOI-Request-to-Georgian-Bluffshttps://www.scribd.com/doc/242395541/Oct-7-2014-FOI-Request-to-Georgian-Bluffshttps://www.scribd.com/doc/242462997/Chronology-of-Documentshttps://www.scribd.com/doc/242462997/Chronology-of-Documentshttps://www.scribd.com/doc/242462997/Chronology-of-Documentshttps://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004http://www.grey.ca/http://www.grey.ca/http://www.grey.ca/http://www.grey.ca/https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/242462997/Chronology-of-Documentshttps://www.scribd.com/doc/242395541/Oct-7-2014-FOI-Request-to-Georgian-Bluffshttps://www.scribd.com/doc/242395541/Oct-7-2014-FOI-Request-to-Georgian-Bluffs


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There is no reference in the report to the fact that a majority Liberal government was elected after

these meetings, and that a new Minister of the Environment was appointed at the end of October 2003.

I read every Speech from the Throne and every Budget speech beginning in 2004 and did not see a

single word about septage. Furthermore, in response to my FOI request, Mr. Moore did not provide any

documentation of any sort about the promise that the Province has broken.

So as far as I have been able to determine, there never was any promise by the Province in a form that

anyone who was spending their own money could take to the bank. If anyone ever again hears Mayor

Pringle (or Mayor Barfoot) talk about the Province breaking its promise, please ask for specifics.

Section 5.0discusses the existing (in 2004) wastewater treatment plants in Grey County of which there

were a total of 12 (primary at Owen Sound, secondary or tertiary at Flesherton, Craigleith, Markdale,

Amik, Dundalk, Derby, Meaford, Thornbury, Durham, Hanover and Neustadt). Chatsworth is the only

municipality without a wastewater treatment plant. At the time, it is noted that there was significant

uncommitted capacity at eight of these treatment plants.

Section 8 provides a list of conclusions. Recommendations are in Section 9. The report concludes that a

privately owned and operated dewatering and composting facility at the Durham wastewater treatment

plant was the least costly and most socially and environmentally acceptable alternative considered.

October 11, 2014Document #1 (continued):Septage Management Plan for the Municipalities of

Grey County(March 12, 2004) and Document #1A:Table 4 from this report.

Section 4.2of this report deals with quality of septage (that is, its chemical and biological contents)

which must be taken into account in the design of treatment and disposal facilities. References are

made to samples taken in 20012003 at wastewater treatment plants in the Town of Meaford, the

Municipality of Northern Bruce Peninsula, the Town of Saugeen Shores, the City of Hamilton and theDistrict of Muskoka.

The sample data are summarized in Table 4of the report that was not provided in response to my

Freedom of Information request. Rather, I downloaded it from the Grey County website in April of 2013.

Section 4.2states that: It should also be noted that in some grab samples, there were high elevated

levels of metals such as copper, zinc and aluminum. Copper was reported to be as high as 290 mg/L, zinc

at 750 mg/L and aluminum at 5300 mg/L. It is not known where the high levels of metals originated.

These parameters may be from chemicals and cleaning products utilized in households and disposed of

through plumbing to the septic tank. It should be noted that in all cases, for the selected parameters,

other than pH and chloride, the average concentration of septage exceeds the Ontario Sanitary ModelSewer Use Bylaw criteria.

The report goes on to say that: The U.S. EPA has suggested a design guideline of 8 mg/L for copper,

40 mg/L for zinc and 50 mg/L for aluminum . As can be seen in Table 4, some grab samples indicate

much higher levels than the design concentration listed for copper and zinc, which needs to be
https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/242610872/Table-4-from-March-12-2004-report-by-Henderson-Paddon-Associateshttps://www.scribd.com/doc/242610872/Table-4-from-March-12-2004-report-by-Henderson-Paddon-Associateshttps://www.scribd.com/doc/242610872/Table-4-from-March-12-2004-report-by-Henderson-Paddon-Associateshttps://www.scribd.com/doc/242610872/Table-4-from-March-12-2004-report-by-Henderson-Paddon-Associateshttps://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004https://www.scribd.com/doc/240393509/Grey-County-Septage-Management-Plan-March-2004


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investigated further to ensure there is not a problem with final disposal of treated wastewater or

compost on farm land in regard to heavy metals.

At Bio-Digester meetings that I have attended and in related documents, I have not noted any

references to testing for heavy metals. Given the data contained in the 2004 report about heavy metals

in some septage in Ontario, one would think that it would be a good idea to test the digestate (theend product that is obviously much more concentrated than raw septage). Perhaps this has been done,

or is being done on an ongoing basis, and I just dont know about it.

The report contains no information about pharmaceuticals; are they destroyed, or, like heavy metals,

might they be concentrated?

October 12, 2014Document #2:Anaerobic Treatment of Septage/Biosolids to Produce Biogas,

Electrical Power and Treated Biosolids,Henderson Paddon & Associates, June 2006.

Section 1.0of this report states that: The Ministry of the Environment, several years ago, indicated that

the disposal of untreated septage on agricultural land will be discontinued and that all septage will needto be treated before being disposed of on agricultural land.I assume this to be a reference to the

discussion with Minister C. Stockwell in 2003 (see my October 10 comments regarding Section 1.1 of

Document #1).

It goes on to say that: The Townships of Chatsworth and Georgian Bluffs are interested in being

proactive with regard to treatment of septage and have therefore engaged Henderson Paddon &

Associates Limited to further investigate a proven agricultural manure anaerobic digestion system

which could be applied to treat septageand biosolids .I take the portion of the sentence that I have

emphasised with bold font to mean that the consultant was not aware of any (or very few) working

biodigesters for human waste. See comments on Section 3, below.

These are the first references in the documentation to: a) cooperation between the Township of

Chatsworth and the Township of Georgian Bluffs; and b) anaerobic digestion for the production of

biogas and electricity. Note that anaerobic digestion was notone of the options considered in the March

2004 Management Plan for Grey County.

Section 2of the 2006 report deals with quantity and quality of septage for Chatsworth and Georgian

Bluffs combined, using figures from the 2004 report. The 2006 report for Chatsworth and Georgian

Bluffs is silent about heavy metals; there is no mention of the need for follow-up about heavy metals

raised in Section 4.2 of the 2004 report.

Section 3is a very high-level discussion about how a biodigester works. There are references to the use

of corn stalks and to the Hydro One feed-in tariff. There is no discussion about the reason for mixing

additional digestible materials (in this case, corn stalks) with septage. As I understand it, bio-digestion of

animal manure does not require additional materials to be added; in turn, I believe this means that

comparisons with Bio-Digesters for animal manure are somewhat limited in value.
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Section 4provides a general description of facilities required and costs. I note that about three-quarters

of the estimated annual operating cost (a little more than $200,000) is attributed to the cost of

disposing of the digestate.

Section 5is titled Financial Analysis. The total cost was estimated at $1.54 million (2006). Revenue

numbers are based on the assumption (that is stated as a recommendation) that residential septic tanksbe pumped every three years and that the tipping fee be $35 per cubic metre.

October 13, 2014Document #3:Minutes of January 8, 2007 meeting among Chatsworth, Georgian

Bluffs and engineering consultant

Although obviously there had been some informal discussions after the June 2006 report was tabled,

this appears to be the first of a series of official meetings held in 2007. The Township of Chatsworth

was typically represented by the Mayor, Deputy Mayor and CAO-Clerk.

In point 5 of these minutes (that are on the consultants letterhead), the minutes outline what are said

to be two approaches, the first of which is to use a proven technology and design facilities fromEurope .The second approach is to Carry out a pilot project in conjunction with a private supplier of

anaerobic digesters to test septage and agricultural products to produce biogas before construction of a

full scale facility.

It isnt clear to me why the options are outlined in this way. If proven technology and design facilities

(approach #1) exist, then why would the second approach involving testingbe suggested as some sort

of alternative? Maybe you had to be there but in any event, it appears from the actions agreed at the

meeting that the parties were intent on obtaining funding for the first approach.

At point 14 of the minutes it is implied that Chatsworth had already made a decision (or would shortly

make a decision) to pay for consulting fees from the Federal gas tax money.One would think that

this would have been something that would be drawn to the attention of taxpayers.

Point 18 of the minutes sets February 12, 2007 as the date for the next meeting, but there are no

records from or related to a meeting on that date.

The townships and the consultant put considerable effort into trying to obtain funding. Here, without

further comment, are the documents that were prepared during this period:

1.Presentation Brief Feb 2007(appears to have been produced by Henderson Paddon)

2.Funding request to Minister Dombrowsky (Agriculture) Feb 19, 2007

3.Funding request to Minister Broten (Environment) Feb 19, 2007

4.Funding request to Parliamentary Secretary of Minister of Agriculture Feb 23, 2007
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5.Support Letters (from Western Ontario Wardens Caucus, Grey County Federation of Agriculture,

National Farmers Union Local 336, Christian Farmers Federation of Ontario, Grey County Forest

Stewardship Network) AprilJune, 2007

In response to my Freedom of Information request of June 11, 2014, the Township provided no copies of

minutes of Council Meetings that dealt with the June 2006 report or with the activities of the Bio-Digester Committee in 2007 that arose out of the June 2006 report, including any discussion about

funding. This strikes me as being odd, so I intend to make further inquiry.

October 14, 2014Gestation Period(Documents from mid-2007 to mid-2008)

Document #15:Revised Estimates 2008(Henderson Paddon updates of Table 4, 5 & 6 in June 2006

report)August 7, 2008

It is interesting to compare these tables to the same-numbered tables in the June 2006 report

(Document #2). For convenience,click here to see the comparisons(in each case, the table from 2006 is

followed immediately by the table from 2008). No rationale is provided for any of the changes, some ofwhich are very significant. Inflation from 2006 to 2008 would account for increases of less than 5%

(inflation rates here), but many other factors can influence construction and equipment costs.

With regard to Table 4(Project Costs), there are round number increases for pretty well all

components (for example: heating system increase of 25% from $40,000 to $50,000; receiving station

increase of 20% from $50,000 to $60,000; and generator set increase of 14% from $145,000 to

$165,000). In addition to a 25% increase in the unit cost for building storage room for digestate, the size

is tripled (from 1,155 cubic metres to 3,465 cubic metres). The per unit cost of constructing the primary

and secondary digesters is 33% higher in the 2008 estimate compared to the 2006 value.

Finally with regard to Table 4, new items in the 2008 estimate include the start-up of the treatment

system ($60,000), engineering assistance for commissioning treatment system ($68,875) and monitoring

of treatment and performance ($90,000).

The overall sense I get from these figures is that the design was evolving, especially with regard to

requirements associated with processing human septage rather than animal manure.

Table 5shows estimated operational costs. The most notable difference to me is the 66% increase in

cost of corn stalks (from $30 per tonne to $50 per tonne).

Table 6shows an increase of almost 30% in the assumed tipping fee ($45 per cubic metre compared to

from $35 in the 2006 report). Again, there is no explanation for this. With the revised (higher) cost

estimates and the higher assumed tipping fee, the payback period is shown to be less than ten years.
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Document #14:Hydro One Cost EstimateJanuary 4, 2008

The cost estimate from Hydro One for their work in connecting the biodigester to the grid was $23,000

plus taxes. The document states that the Connection Cost Recovery Agreement must be signed on or

before May 7, 2008 for the planned in-service dated of September 1, 2009.

Document #9 through Document #13Meetings in 2007 (Chatsworth, Georgian Bluffs, consultant)

Some of these are Agendas only (no minutes). My understanding is that Chatsworth was usually

represented at these meetings by Mayor Greig, Deputy Mayor Pringle and CAO Will Moore. I assume

that the role of the CAO was to bring business, management and administrative perspectives to the

table.

The purposes of these meetings seem to have been to flesh out the ideas and try to find support and,

importantly, external funding. Some expenses were incurred, so by email on Oct 13, I asked CAO Will

Moore for more information about how payments were authorized. On Oct 16, Mr. Moore replied that

he would respond in due course. Stay tuned for further information on this.

Joint Meeting April 2, 2007

There is nothing much of note here. Evidently, some representatives of Chatsworth and Georgian Bluffs

managed to meet with some provincial politicians and bureaucrats.

Joint Meeting #4 April 24, 2007(Note that this is an Agenda onlyno minutes were provided in

response to my FOI request)

Again, it doesnt appear to me that much happened or was decided. Follow-up and cultivating contacts.

Joint Meeting #5 June 19, 2007(Agenda only)

Ditto. Expenditure of $7,420 noted for Study and Connection Cost Agreement for Hydro One.

Joint Meeting #6 Sept 27, 2007(Agenda only)

Judging by the Agenda for the next meeting, it appears that this one was cancelled.

Joint Meeting #7 October 5, 2007(Agenda only)

This Agenda is identical to the one for the September 27 meeting.

October 27, 2014Policy Statement about septage by Ministry of the Environment, 2005(summarized

inthis July 2007 Fact Sheet). Note: This Fact Sheet was not among the documents provided by

Chatsworth in response to my FOI request, but I am including it here for background.

The introduction to the next document provided in response to my FOI request (Document #16) refers

to a Provincial Policy Statement about septage published in 2005 (before the Bio-Digester option was

decided). For purposes of background before posting Document #16 (in a day or two), here is a brief

summary of the policy as outlined in the 2007 Fact Sheet.
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The options for treating and disposing of septage are said to be: alkaline stabilizationwhich involves the

addition of lime or alkali to reduce pathogens, with the treated product being spread on approved sites;

compostingthat, in 2007 when the Fact Sheet was prepared, was not used in Ontario but was under

consideration; stabilization lagoons(not the same as storage lagoons) designed to treat septage to MOE

standards; dewatering trencheswhich are long, narrow trenches excavated in permeable soils for the

purpose of dewatering septage prior to final disposal at approved landfill sites or further stabilized and

used as nutrients at approved sites; dewatering facilitieswhere treatment usually involves screening,

dewatering to separate the liquid from the solids, and may involve the treatment of either the separated

liquid (such as by means of a constructed wetland system), the separated solids (such as by disposal at

approved landfill sites or further stabilized and used as nutrients at approved locations), or both; and

incinerationafter dewatering, which the 2007 Fact Sheet states has not found to have been cost

effective and was not practised in Ontario at that time.

The 2005 Policy Statement also states that a municipality could secure sufficient treatment through

building its own sewage treatment plant, through written agreement with another municipality, or

through an approved private sector facility.

November 13, 2014Further to myOctober 7, 2014 FOI request to Georgian Bluffs,I spent much of the

day on October 29 in the Georgian Bluffs council chambers reviewing documents provided by CAO/Clerk

Murray Hackett. I have posted thelist of documentsI reviewed, as well as my closure letterto Mr.

Hackett. I made very few copies, but I will scan those I that I did make and post them as part of the

chronological review.

November 13, 2014: Document #16Business Plan -Anaerobic Treatment of Septage/Biosolids/Corn

Stover to Produce Biogas, Electrical Power and Treated Biosolids, April 2009 received from Chatsworth

and Document #16aTables 1, 2, 3 and 4from Document #16 (obtained from Georgian Bluffs)

First, I am putting Business Plan in quotation marks in these comments because the document doesnt

conform to my understanding of a rigorous Business Plan.

Note that this Business Plan is dated April, 2009. Except for the Hydro One estimate (Document #14)

and the Revised Estimates (Document #15), no documents from 2008 were provided in response to my

Freedom of Information request. I dont understand why there wouldnt have been correspondence and

meetings leading up to the authorization for the consultant to prepare this report (or the updated costs

in 2008, for that matter).

Section 1.0 (Problem Statement)of Document #16 makes reference to the 2004 report prepared for

Grey County (Document #1 discussed earlier), stating that the overall project for the entire County as

recommended in that report did not go forward.

Section 1.0 also refers to the Policy Statement published in 2005 (that I reviewed on October 27, below):

In addition, the Reserved Sewage System Capacity for Hauled Sewage Policy, which was introduced in

2005, indicated that municipalities must provide capacity for treating septage at their wastewater
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treatment plants or have a separate facility for treating septage to provide for significant new residential

growth.

To me, this reads as though wastewater treatment plants were made obligatory by the Policy Statement

but, to the best of my understanding, that was not the case. Even today, there are is no legislation and

there are no regulations implementing this Policy, so it seems to me that the Policy Statement wasnothing more than a statement of intention of some sort by the province in 2005.

Section 2.0 (Project Objective)reads as though a decision had already been made to proceed. In

response to an emailed request about this, CAO/Clerk Will Moore sent the following note to me on

October 30: Regarding initial costs for engineering Council approved payment of $ 3,340 to Henderson,

Paddon from the Federal Gas tax grant on December 27, 2006. In 2007 there were accounts approved in

the net amount of $ 16,207.30 and on January 2, 2008 Council approved a resolution to fund those costs

with the Federal Gas Tax grant.

I will be reviewing the minutes of Chatsworth Council to understand the nature and form of what seems

to have been some sort of contract that must have been in place with the consultant.

Section 3.0 (Analysis of Septage Treatment Options)starts by making reference to the 2004 study for

Grey County (please refer back to my comments about this posted on October 10 and 12). It then goes

on to compare the two least costly alternatives from the 2004 study (updated to 2009) with the costs for

the Bio-Digester.

I hope I am wrong in this, but this appears to me to be an apples and oranges comparison in that the

costs from the 2004 report arefor treating all sewage in the Countywhereas the Bio-Digester option is

sized to treat sewage from Chatsworth and Georgian Bluffs only. If this is the case, then the result of the

cost comparison (that the biodigester was much less costly than the other two options) was a foregoneconclusion. Perhaps I am missing something ?

Sections 4.0 through 10.0are titled Proposed Activities, Project Rationale, Expected Benefits, Timelines

and Milestones, Performance and Progress Measures, Project Risks and Project Budget. Clearly, plans

were well along when this was written.

Regarding Project Risks, I have written elsewhere on this blog and in correspondence with Mayor

Pringle going back almost two years that there was no evidence whatsoever in 2009 that the province

was prepared (or even preparing to) ban the spreading of septage on approved vacant land, but the risks

identified in this Business Plan didnt even include a possible delay in this regard.

When the decision was made to borrow the money and proceed with construction, it was 100% certain

that this assumption was wrong. The resulting financial predicament was 100% foreseeable.

Tables 1, 2 and 3 of the April 2009 report are exactly the same as the revised costs estimates from 2008

(Tables 4, 5 and 6 in Document #14). Table 4 of the April 2009 report, showing cash flow projections, is

consistent with my understanding that plans were well along when this report was written.


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November 14, 2014: Document #17Build Canada grant application(May 6, 2009) withsupporting

documents(Document #18)

Section II of the Application indicates tendering by Sept 15, 2009 with construction starting on October

22 and substantial completion by the end of June, 2010.

On page 4 of 13 of the Application, the answer to the question about cost recovery states that the

tipping fee for septage and biosolids would be $45 per cubic metre which would produce annual net

revenues of $339,400 after expenses of $227,100. This answer includes some discussion about the

possibility of lower revenues due to less septage (this is the kind of discussion I wouldexpect in a

section titled Project Risk in a Business Plan, but Document #16 contains no such discussion). On page

8, there is reference to what appear to me to be apples and oranges alternatives in the Business

Plan (see my comments with regard to Document #16).

The supporting documents include a letter from Chatsworth Mayor Greig to Georgian Bluffs Mayor

Barfoot that states: The Council of the Township of Chatsworth supports your application for Build

Canada Funds for a BioDigester in the amount of $2,700,000.00. Chatsworth is committed to 50 percent

of the municipal portion of the cost of the project. Council will pass a motion at our next meeting.

It appears that the June 2006 report (Document #2) with updated tables (Document #15) were attached

to the application.

November 15, 2014: Payments by Chatsworth in the early years (2006 and 2007)

As I was working through the documents in chronological order, it dawned on me that I hadnt seen

anything about payments to the consultant for work related to the Bio-Digester. I asked Chatsworth

CAO/Clerk Moore about this, and he provided some information by email on October 29. We later

arranged for me to go through Council minutes prior to 2012 that are not posted on the website; I did

this on November 13.

Chatsworth incurred costs of about $23,000 in 2006 and 2007 (based onthis listprovided to me by

CAO/Clerk Moore on Nov 13). There was evidently some sort of verbal agreement between Chatsworth

and Georgian Bluffs about equal sharing of Bio-Digester costs. I assume there was a contract between

the consultant and the Township of Georgian Bluffs, but there was no contract between the consultant

and the Township of Chatsworth.

The costs in 2006 were for the consultant only, but the costs for 2007 covered both the consultant and a

payment to Hydro One for a study related to connecting the planned Bio-Digester to the grid.

CAO/Clerk Moore told me that the first reference to the Bio-Digester is contained in theminutes of a

meeting of Chatsworth Council held on December 27, 2006.Motion 344/2006 states that Chatsworths

share (that is, 50%) should be paid from the Federal Gas Tax money.

The Bio-Digester is not mentioned in minutes of the Chatsworth Council in 2007 although regular

payments continued to be made to the consultant. Theminutes of the Chatsworth Council meeting on
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January 2, 2008(Motion 4/2008) deal with the costs incurred during 2007 in the same way as for those

incurred during 2006 (Federal Gas Tax Reserve).

I did not ask to see the budget for 2007, or the Audit Report for that year. However, based on the fact

that the Audit reports for 2011, 2012 and 2013 contain no separate accounting for the Bio-Digester even

though the total costs to Chatsworth over these three years was close to a million dollars, I would guessthat costs for 2007 were buried somewhere (for related information, see Hiding the Costsunder the

Biodigestertab).

I dont know about the legality or ethics associated with flowing money to another township and to a

consultant on the basis of verbal agreements, or about audit-related rules or best practises insuch

cases. In my opinion, however, this doesnt meet any reasonable test of transparency.

November 19, 2014: Design meetings in the spring and summer of 2009

After the Build Canada grant application was approved, the parties met regularly in a series of design

meetings, the first of which was held on June 16, 2009 (minutes here). At that meeting, the consultanthanded outthe proposed schedule.

The Chatsworth Council met on the next day. Points 5 and 6 of motion 155/2009 in the minutes of that

meetingstate:

5. Georgian Bluffs and Chatsworth agree to finalize an agreement on the construction, invoicing, project

management, acceptance, maintenance and operation of the Bio-Digester, including revenue sharing,

based o