Sticking 82 households with thousands of dollars in plumbing bills may not be the best way for the city to avoid a class-action lawsuit, say Takhini North residents.
Area homeowners don’t want to pay $10,000 each for water, sewer and road and surface works.
And they don’t want haggling over infrastructure replacement costs to undermine neighbourhood participation in Whitehorse’s next major housing development, said Mark O’Brien, president of Takhini North’s community association.
The cost is too high because the plumbing beneath their homes is city property, he said Thursday afternoon.
“There’s been a lot of debate over whether it’s a public utility or not,” he said.
A legal opinion by a local lawyer says residents aren’t responsible for the plumbing works under their homes, said O’Brien.
They want the city to draft a less-costly alternative to avoid an expensive court battle, he said.
Residents have discussed a class-action lawsuit, or 82 individual lawsuits against the city over infrastructure costs, he said.
“I think some people would like to see it go that way — it’s been discussed.”
At the heart of the dispute are wildly varying infrastructure improvement costs.
Original estimates from the consortium that bought the subdivision pegged those costs at $6,000. The city initially predicted $22,500. Then city officials bumped it up to $24,000. Now they peg them at $10,000, after honing the project.
That, and who’s responsible for paying for the work has residents confused, said O’Brien.
While court is not a preferred option to sort this out, it has been considered, he added.
The original repair figure was given to residents by sales agent Susie Rogan, who represented a group of local lawyers who bought and began selling the properties in 1999.
Takhini North’s Canadian-army-built water and sewer systems date back to the 1940s, and are crumbling, leaking and prone to failures, according to a government-sponsored UMA Engineering report done in the late ‘80s.
To make matters worse, the water system servicing the neighbourhood is unique in the city.
Groups of homes’ waterlines are connected in series.
If one home in a group experiences a failure, so will every other home that follows that waterline — kind of like a dud Christmas light shorting out an entire string.
Last fall’s city estimate of $22,500 included a one-third share of road resurfacing, pipes from city mains through the property lines to the house, as well as plumbing work in people’s basements.
The latest $10,000 figure is a roughly 50-50 cost split between road/surface and plumbing work from the property line to the house.
The new figure also comes in well below the $24,000 estimate the city engineer gave last spring.
However, it’s still way more than area residents are willing to pay, said O’Brien.
“The latest offer sounds a lot better, but it’s actually just playing with the numbers and who is responsible for what costs. It actually hasn’t changed very much in our minds.”
Residents are wondering about a number of things, said O’Brien.
They’re confused about the details surrounding how Whitehorse lawyers Murray Leitch, Terrance Boylan and Tim Preston acquired the entire subdivision from Ottawa for $2 million and then started selling the houses for a huge profit, without fixing the neighbourhood’s infrastructure as recommended in the government tender package.
The lawyers’ bid was substantially higher than most other bids, including those from another Whitehorse lawyer and some local real-estate agents, according to Public Works Canada records.
Residents are also confused by the fact that only a few years before the lawyers made their purchase, using numbered company 18001 Yukon Inc., the city made the government of Canada replace all of the infrastructure in Takhini East and Takhini West before selling it, said O’Brien.
Both Takhini East and Takhini West had all of the same problems as Takhini North before they were fixed.
And, residents are questioning how the lawyers could use an easement agreement to transfer responsibility for the utilities running underneath their homes to another numbered company they owned, 18122 Yukon Inc., he said.
The second company, in turn, transferred the responsibility and duty to pay for replacement to first-round Takhini North homebuyers via conditions in their sales agreements.
Some second-round buyers said they were never informed of the easement agreement, the state of the infrastructure under their homes or the possibility they would have to pay tens of thousands of dollars in plumbing bills.
Community representatives have asked the city not to include the costs of replacing the infrastructure in their neighbourhood in the charrette discussions that continue next week, said O’Brien.
The city began the charrette process with residents last May and is looking to build scores of residences in Takhini North in the city-owned greenbelt that abuts the area’s 41 duplexes.
The city has been trying to work with residents as best it can to come up with a plan to fix the decrepit sewer-and waterworks, but cannot and will not use taxpayer dollars to fix private property, said city manager Dennis Shewfelt.
“What the city is proposing is consistent with the reconstruction of any infrastructure,” Shewfelt said Thursday morning.
“We’re following the local improvement charge approach.”
The city is not allowed to foot the bill for water and sewer lines on private property, but is willing to use a local improvement charge arrangement to help homeowners by paying for all the costs upfront and accepting repayment with interest over 15 years, said Shewfelt.
The city’s position is that the homeowner is responsible for the infrastructure from the property line to the dwelling unit, including basement work, said Shewfelt.
It also wants residents to share a portion of the surface improvements under the local-improvement charge.
The city required Canada to replace water and sewer lines in Takhini East and West before selling houses because it had the authority to do so, said Shewfelt.
Ottawa was adding a number of new lots in those neighbourhoods, which “triggered” city processes, he said.
There was no infill in Takhini North, so the sale was essentially a transaction between the federal government and the lawyers, he said.
The city played no role in the land sale, so no city zoning or development processes could have been employed — the entire subdivision already existed, said Shewfelt.
“We cannot force someone to do something with private property.”
The city has their own legal opinion, provided by local lawyer Andre Roothman, which asserts the municipal government is not responsible for the water and sewer work under the 82 homes.
In line with residents’ wishes, the city doesn’t plan on discussing infrastructure costs during the Takhini North charrette next week and will keep the focus on Whitehorse’s next major development.
The number of new homes, including houses and/or multi-family units, has not been decided, but the money the city collects from sale will have to pay for the entire cost of the development, said Shewfelt.
“The development must pay for itself,” he said.
“In other words, the taxpayer would not be subsidizing any new development.”