A failed sewer installation has left this Alberta village millions of dollars in debt

Ma-Me-O Beach in debt over sewer The mayor Ma-Me-O Beach says the village is $5.5 million in debt over a failed sewer system. Jessica Robb reports.

The summer village of Ma-Me-O Beach on Pigeon Lake is facing a bill for millions of dollars as a result of a failed attempt to install a sewage system in the community.

"In many ways it has divided our community," Mayor Christine Holmes told CTV News Edmonton. "It has been a very big topic for a number of years. Going into our hundredth anniversary this year it's tough to see that we’re not concluded yet."

Holmes said the project to replace the existing septic tanks with a sewer system started in 2017 under the previous council.

"Previous council had promoted this project and had believed it would increase property values. It would alleviate the potential leaks and spills that happen with traditional septic tank pump outs, as well as alleviate the concern with cracked and leaking tanks."

The original cost of the project, which was completed in 2018, was supposed to be $2.5 million, with two-thirds of the money coming from grants.

Residents weren't quick to hook up to the new system. Of the approximately 279 lots at Ma-Me-O Beach, Holmes said only 26 homes are hooked up to the line.

ISSUES WITH THE SYSTEM

In February 2019, issues were discovered with the system while trying to do a residential hook up.

"In the installation process they discovered that the pipeline had frozen. So they started looking at that, determined that it was a heat tracing issue, and shut down the line. Did some investigation, did some remediation," Holmes said.

In 2020, the line froze a second time.

"At this point the line was shut down, we went to pump outs, which the village subsidized as we started to explore and really started to dig into what do we need to do for next steps."

Holmes said the city selected a contractor to do the required remediation work in August 2021.

"By spring of 2022 we had about 24 per cent of the line complete, so our hope was to run that 24 per cent as a test section and to run it for one whole year. If it was successful we would continue with the rest of the remediation, the other 75 per cent, and hopefully instill some confidence in the residents."

But Holmes said the contractor left the wastewater business shortly afterwards, leaving the project at a standstill.

No work has been done since.

"Because it has not been fully remediated, we can’t turn it on."

$5.5 MILLION BILL

In 2020, Ma-Me-O Beach went to arbitration with the original contractor who built the system in an attempt to recoup some of the costs.

The village lost the arbitration case.

The 80-page arbitrator's report was released by the village last month.

"The system was doomed to fail because of the faulty design," the report said.

"Devastated. Devastated. It’s literally paralyzed our ability to go above and beyond for the community," Holmes said of the decision.

"Never did we expect to be in this position. We were extremely hopeful, we felt that the issues highlighted were pretty clear. The decision didn't go in our favour."

Between money owed to the contractor, remediation, investigations and legal costs, Holmes said the village owes about $5.5 million.

On top of that, the sewer system is still unusable, and there are concerns that sewage from the line could leak into drinking water.

"It's a huge concern," Holmes said, but added the village doesn't have the money to do any more repairs.

"We're not even in a position to entertain completing any more of it. We literally do not have any funds to do so."

Holmes said council is exploring every available option to avoid passing the debt on to taxpayers in the village.

"A lot of people have chosen Ma-Me-O for their retirement, so they’re fixed income, or they face different fiscal challenges that really would make it impossible for them to take on say, increased taxes with no additional services, or to pay a fee, or to be hit with a $20,000 bill just to pay off this debt."

Holmes said officials even considered dissolving the village.

"Even if this village dissolves, Minister McIver was very clear in his letter that it doesn't absolve our ratepayers from paying back the debt."

Holmes said village officials have reached out to the province a number of times.

"We were looking for support, and steer, and guidance, and we feel very abandoned."

The province issued a written statement in response to Holmes' claims.

“Municipal Affairs received a request from the Summer Village of Ma-Me-O Beach for financial assistance related to debt incurred from the village’s wastewater project and subsequent arbitration on the matter," spokesperson Mackenzie Blyth wrote in an email to CTV News Edmonton.

“Some of the tools available, which were recently suggested to the community, include funding support via the Municipal Sustainability Initiative, the Canada Community Building Fund, and starting in 2024, the Local Government Fiscal Framework.”

Holmes said Ma-Me-O Beach officials won't rule out any options.

"Council is committed to going to government bodies and essentially begging for the support that we think we need right now."

"I'm looking for a partnership. I'm looking for a collaborative way of finding resolution here."

Ma-Me-O Beach will hold its annual general meeting on July 8, and officials are expected to provide the village with an update on the project.

The village is about 90 kilometres south of Edmonton.

With files from CTV News Edmonton's Jessica Robb