Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West

Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West

Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: AFRAAT@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Decou Road Drain Norfolk County

Decou Road Drain (RE) 2015ONAFRAAT10

STATUTE:

Drainage Act

HEARING:

May 1 and June 25, 2015

DATE OF DECISION:

July 9, 2015

2015-10

NEUTRAL CITATION:

2015 ONAFRAAT 10

DECOU ROAD DRAIN Norfolk County

IN THE MATTER OF THE DRAINAGE ACT, R.S.O. 1990, CHAPTER D.17, AS AMENDED.

AND IN THE MATTER OF: Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Norfolk County Roads Department by Bill Cridland under section 54(1) of the Drainage Act from the decision of the Court of Revision pertaining to the Decou Road Drain.

Before: Jeffrey J. Hewitt, Vice-Chair; Ed Dries, Member; Richard Smelski, Member

Appearances: Mark Abradjian, Council for the Appellant William Mayes, Witness for the Appellant John Kuntze, Witness for the Appellant T. Gregory Smith, Engineer who created the report John Vallee, President of G. Douglas Vallee Limited Nathan Kolomaya, Council for Assessed Landowners Robert Witham and Brown-Bemeyere Motors Limited Mark Ghesquiere, Assessed Landowner Tom Thompson, Assessed Landowner Michael Duke, Assessed Landowner

DECISION OF THE TRIBUNAL

Background

The Agriculture, Food and Rural Affairs Appeal Tribunal (“Tribunal”) held this hearing in Norfolk County on May 1, 2015 and continued the hearing on June 25, 2015. The Engineer’s report dated July 18, 2014 for the Decou Road Drain (“Report”) was prepared by G. Douglas Vallee Limited and submitted by Mr. T. Gregory Smith, P.Eng., (“Engineer”). The appeal to the Tribunal was filed on behalf of the Norfolk Roads Department by Mr. Bill Cridland (“Appellant”).

Mary Mercato, Clerk of the County of Norfolk, performed the duties of Clerk of the Tribunal.

Preliminary Matters

This matter was first before the Tribunal on May 1, 2015, when it came to the Tribunal’s attention that the Notice of Hearing was not distributed to all landowners assessed or compensated in the Engineering Report as required. As discussed later in this decision, it is imperative in an assessment appeal that any landowner who may be affected by the Tribunal’s decision have notice of the appeal so that they may, at their discretion, be given the opportunity to participate in the process. Accordingly, the Tribunal adjourned the hearing to June 25, 2015 to ensure such notice was given to all such landowners.

Prior to the hearing, the Tribunal issued an order making all landowners assessed or compensated in the Report parties to the hearing. The Municipality filed an Affidavit of Service, dated June 2, 2015, as proof that all parties had indeed been served with the Notice of Rescheduling of Hearing indicating a hearing to be held on June 25, 2015.

The nature of this particular appeal was somewhat unique due to the fact that the Appellant, the Norfolk County Roads Department, and the Respondent, Norfolk County, are for all intents and purposes are one and the same. The Respondent adopted the proposed Engineering Report but the Roads Department objected to what it viewed as a disproportionate assessment against it and thus filed an appeal. As a result, the hearing proceeded with the engineer, in essence, defending his method of assessment; with the consent of Mr. Abradjian, who technically is counsel for Norfolk County but was at the hearing for the Roads Department. The engineer was allowed to represent the County, with full rights of calling evidence and cross-examination; he had no independent legal counsel representing him nor did legal counsel advocate for the Respondent.

Several assessed landowners requested to make statements to the Tribunal and were therefore made parties to the appeal but without the right of calling evidence or cross-examination. They were Robert Witham and Brown-Demeyere Motors Limited, both represented by Nathan Kolomaya, as well as, Mark Ghesquiere, Jim Foucault, Tom Thompson and Michael Duke, who were self-represented.

At the commencement of the hearing, Mr. Abradjian requested a further adjournment, on consent of the parties, to allow the parties, in particular the Appellant and Engineer (again, acting as Respondent) to carry out a proposed resolution that they had reached in principal without input from the Tribunal. This resolution would involve the Engineer re-visiting the schedule of assessment following agreed-upon parameters; the resolution also addressed the issue of the cost of carrying out this re-assessment. However, the resolution was dependent upon the matter, once re-assessment had been carried out, coming back before this Tribunal, without the opportunity, save for appearing before the Tribunal, for affected landowners to have any input or comment. Although the Tribunal encourages all parties to negotiate resolutions to their disputes, and despite the consent request, the Tribunal denied the adjournment. It was concerned that the proper procedure should be followed to allow proper landowner involvement. It was also concerned that, if an adjournment was granted and the lands re-assessed, when the matter returned before the Tribunal as proposed the potential existed for numerous landowners to voice their concerns about the new assessments for the very first time, making any new hearing potentially unwieldy. Given that all the interested parties and witnesses were present, the Tribunal decided to proceed with the hearing in the normal course.

Issue

The Appellant, the Norfolk County Roads Department, disagrees with the Engineer’s assessments of the benefit and outlet liability attributed to every parcel of land affected, in particular those lands situated to the east and west of Norfolk Street South, on the basis that other than the roads and one property (the Dream Villa Development, as will be discussed below) all properties were assessed a value of ‘zero’. If the Tribunal agrees that the assessment was not properly apportioned to all affected lands, the Appellant requests that the Tribunal order the Engineer to revise his Report, at his own expense, to include assessments for benefit and outlet liability attributed to every parcel of land affected, in particular those lands situated to the east and west of Norfolk Street South. Further, the Appellant requests that the quantum and/or proportion of the benefits and outlet liabilities to be used by the Engineer be directed by the Tribunal.

Evidence

Mr. T. Gregory Smith, P. Eng., the Engineer who prepared the Report

The Tribunal heard evidence from Mr. Smith who attended as a witness on behalf of the municipality. He stated there are two distinct areas requiring drainage: one area adjacent to the south side of Decou Road, and a second area lying east and west of Norfolk Street.

Branch A of the proposed drain is intended to serve a total drainage area of 76.7 ha. This area includes the lands owned by 2156555 Ontario Inc. (Roll No. 016-29100), which are intended to be a residential development and are in need of a drainage outlet; these lands are generally referred to herein as Dream Villa.

Branch B is intended to replace an existing drainage system that serves an area of approximately 16.75 ha in the northwest portion of the watershed. The existing system is comprised of a 900 mm x 900 mm concrete box culvert beneath the travelled portion of Norfolk Street which discharges into a 900 mm diameter, circular concrete pipe that extends easterly across the property immediately adjacent to the east side of the street. This property is shown to be owned by Brown-Demeyere Motors Ltd. (Roll No. 401-016-092000) and is referenced herein as the ‘Demeyere Property’. This enclosed drainage system discharges directly onto the Dream Villa lands which are immediately adjacent and east of the Demeyere property. The discharge from this system is currently an uncontrolled sheet flow across the Dream Villa lands to a collection point near the intersection of Decou Road and Willow Wood Drive. From this point, it is carried easterly in an open ditch along the south side of Decou Road to the Lynn River.

Mr. Smith expressed the opinion that the existing enclosed drain on Branch B had no known legal status although the pipe across the Demeyere property may be within an “implied easement” as it has been in place for “more than twenty years”. He offered no opinion as to when or how this enclosed system came to exist (nor was any evidence presented by any party to explain how this drain came to be).

Mr. Smith confirmed that the new drainage system was designed based on a 5-year event, which is the current storm sewer design standard applied in Norfolk County. However, the impact of the 100-year event was analyzed as it related to the design of the Stormwater Management facility and the potential impact on the agricultural lands west of Norfolk Street. He concluded that a new drainage system was necessary in order to provide a legal and adequate outlet for the lands served by both Branch A and Branch B.

No issues with regard to the technical design of the drainage systems were identified. Mr. Smith confirmed that Norfolk County and the Dream Villa developer negotiated an agreement on cost sharing related to Branch A. Norfolk County agreed to pay the difference in construction cost between a 417.7 m length of 900 mm and 750 mm diameter pipe. The Dream Villa developer agreed to pay the remainder of the cost related to Branch A. As a result of this agreement, Mr. Smith confirmed that he levied Special Benefit assessment under Section 24 of the Drainage Act against Norfolk County as owner of Decou Road and the entire remainder of the costs of Branch A as a Benefit assessment under Section 22 of the Drainage Act against the Dream Villa property. He identified all properties that will be affected by this work in the Schedule of Assessment for Branch A and showed a $0.00 assessment for Outlet Liability under Section 23 of the Drainage Act against every property. He argued that a $0.00 assessment is a valid assessment that complies with the intent of Section 21.

Mr. Smith acknowledged that there was no agreement between the Norfolk County and the Dream Villa developer regarding the distribution of cost for Branch B. He confirmed that he applied similar logic to the distribution of cost for Branch B as had been applied for Branch A. As such, the increased construction cost associated with the construction of a close drainage system versus an open drain across the Dream Villa property was assessed entirely as a Benefit assessment against this property. He assessed the entire remaining cost of Branch B as a Benefit assessment against Norfolk County as owner of Norfolk Street South. Mr. Smith justified this assessment on the basis that the existing drainage system had no legal status and these improvements would upgrade the existing system and provide a sufficient legal outlet for the road. As in Branch A, he identified all properties that would be affected by Branch B in the Schedule of Assessment and showed a $0.00 assessment for Outlet Liability against each property. He also argued that the assessment approach of levying large Benefit assessments against the local Road Authority for various works under the Drainage Act is common in Norfolk County.

Mr. Smith confirmed his recommendation to assess 100% of the maintenance costs for Branch A and B against Norfolk County as owner of the roads assessed. He expressed the opinion that the new drainage system was really a storm sewer that will serve primarily urban lands and, therefore, the maintenance of the system should be the responsibility of Norfolk County in the same fashion as all other municipal storm sewers.

Under further questioning, Mr. Smith accepted that the affected area on Norfolk Street South represents only a small portion of the overall watershed of Branch B. Mr. Smith acknowledged that the existing pipe through the Demeyere property is in poor condition and subject to structural failure. He confirmed that failure of this pipe could potentially block flows from Norfolk Street South and all upstream lands. He agreed that Norfolk County had no control over the operation of the pipe through the Demeyere property. He admitted that a new drainage system across the Demeyere property would have a life expectancy of 20 to 40 years and would be a direct benefit to the Demeyere property and the road. He also accepted that a new drainage system would be easier to maintain and provide better control of flow through this area. He also admitted that the new drainage system would provide an improved, legal outlet for all lands that discharge into it.

With regard to any re-assessment approach applied to Branch B, Mr. Smith confirmed that he would consider levying an outlet liability assessment against those lands provided drainage by this branch. He also acknowledged that he would be prepared to review the approach to distributing maintenance costs for Branch A and Branch B.

Upon further questioning, Mr. Smith identified a potential issue that was not identified in the report. It related to the potential impact of the construction on private water wells in the vicinity of the construction. He was of the view the matter should be dealt with more specifically in the report in order to cover off that issue if it arose during construction.

Bill Mayes, County of Norfolk - Senior Drainage Superintendent

Mr. Mayes confirmed he has been employed by Norfolk County as a Drainage Superintendent since 2006 and has been involved with this project since it commenced in that year. From viewing a video scan of the drain, he supported the evidence of Mr. Smith as to the poor condition of the 900 mm diameter butt joint concrete pipe that crosses the Demeyere property and he further advised of the existence of a suspected direct connection to this tile from the Demeyere property. He stated that he reviewed the report in detail and supported the conclusion that the works recommended in the report should be carried out.

As a result of his review of the report, Mr. Mayes noted that no outlet assessments were levied against any property within the area affected by Branch B. In his opinion, the Benefit assessment levied against Norfolk Street South for Branch B was excessive. Further, he believed that Benefit and Outlet Liability assessments should have been levied against the Demeyere property east of Norfolk Street South as well as, the lands immediately west of the road owned by Dr. Mark Ghesquiere (Roll No. 402-010-08600). He expressed the opinion that a Benefit assessment should have been levied against the Demeyere property as the drain is being relocated within that property in order to minimize restrictions to future development on that property. Further, an Outlet assessment should have been levied against the Ghequiere lands as the new drain provides a sufficient legal outlet for drainage from these lands. He supported this position by referencing a draft alternative Schedule of Assessment for Branch B that was circulated at the Court of Revision. That alternative included Outlet Liability assessments against all properties within the Branch B watershed although he also expressed the opinion that the proposed Outlet assessments against the lands in that draft were excessively high. In reply, Mr. Smith stated that the draft Schedule of Assessment referenced by Mr. Mayes was circulated at the Court of Revision as a comparative tool to the recommended Schedule of Assessment and the draft was never intended to be used.

Mr. Mayes also stated that the watershed should pay for future maintenance costs and it should not be the sole responsibility of Norfolk County. He argued that this watershed was large and included a significant area of agricultural land. He expressed the view that a shared responsibility in future maintenance costs would be more equitable.

Mr. Mayes confirmed his understanding that all costs related to Branch A were split between only two parties, the developer and Norfolk County. He understood that this distribution of cost was a “political decision”. He admitted that he was aware of other works carried out under the Drainage Act within Norfolk County that were assessed entirely against one owner or involved similar owner/County negotiated costs splits that were also “political decisions”. He concluded his testimony by stating, “In my opinion, the whole project should be assessed properly.”

John Kuntze, P. Eng. - K. Smart Associates Limited

Mr. Kuntze, a drainage engineer retained by the Appellant to review the Smith Engineering Report, expressed the opinion that the assessment of Branch B as shown in the report was incorrect. He stated that Branch B provides legal and adequate outlet to all of the lands within this watershed in addition to the Norfolk Street South. In his opinion, the existing drain across the Demeyere property is owned by and is the responsibility of the owner of that land. He expressed doubt that the drain across the Demeyere property or the Dream Villa lands was ever a natural watercourse. The reconstruction of that reach of drain will undoubtedly be a benefit to the property and increase its value. He testified that neither Norfolk County nor the developer of the Dream Villa lands should be assessed 100% of the costs but rather the costs should be equitably distributed throughout the Branch B watershed as set out in the Drainage Act. The key element of the cost distribution is the development of an equitable distribution between Benefit and Outlet Liability.

It was Mr. Kuntze’s opinion that, when considering all of the drainage circumstances impacting Branch B, a 90% Benefit — 10% Outlet split was a reasonable apportionment. The high proportion of Benefit assessment is justified as the new drain will replace an existing system that has no legal status and is in poor condition; will provide a drain that offers a sufficient, legal outlet for all of the lands; provides an enclosed drain that allows development; and, addresses drainage issues related to the obstruction of the natural flows from the upstream lands caused by the construction of the road and the filling of the Demeyere property. He did not claim that the 90% Benefit — 10% Outlet split was exactly the correct value but instead that the Engineer authoring the report must make that determination, although it should be heavily weighted toward Benefit.

Mr. Kuntze also stated that provisions for the distribution of maintenance cost in Branch B should include all affected properties and not simply 100% against Norfolk County. Although he accepts the fact that the drain is designed as a storm sewer, he believes that the large agricultural component of this watershed should contribute appropriately to its continuing operation.

Mark Ghesquiere, Assessed Landowner

Mr. Ghesquiere confirmed that he was the owner of the agricultural lands lying immediately west of Norfolk Street South and identified as Roll No. 402-010-08600. He expressed the view that the work on the entire drain would be a benefit to Norfolk County and the developer of the Dream Villa lands only. He believes that his lands would have been historically drained by an open ditch, which has at some earlier time been filled. The works now proposed are intended to address a problem that the Road Authority and/or previous landowners caused decades ago. He does not believe that he will receive any benefit from these works and therefore should not be assessed.

Mr. Ghesquiere claims that he originally purchased the property as agricultural land and it is still zoned as agricultural. He expressed the concern that the water retention pond on his property would reduce the developable frontage, but he is accepting of it has he had earlier consented to its placement on his property. However, he states that he has received offers to purchase from developers and believes that the proposed works will reduce the development potential of the property and devalue it by as much as $200,000, for which he is not being adequately compensated.

Nathan Kolomaya, on behalf of Robert Witham and Brown-Demeyere Motors Ltd., Assessed Landowners

Mr. Kolomaya spoke on behalf of Robert Witham and the owners of the Brown-Demeyere Motors Ltd., property. The Witham property is an agricultural property on the west side of Norfolk Road South, somewhat south of the Ghesquiere property. It was his position that the works would have no benefit to the Witham or Demeyere properties at all. They claim to have no need for the drain, are not connected to it and will never use it. He believes the drain should be relocated off of the Demeyere property at the cost to Norfolk County. If it is determined that some assessment should be levied against the Demeyere property, it should be a token assessment at best.

Michael Duke, Assessed Landowner

Mr. Duke owns property on the east side of Norfolk Street South some distance south of the road cross of Branch B. He has lived in this immediate area for many decades. He claims that the Dream Villa lands were once an old gravel pit through which his property as well as the Demeyere and Ghesquiere lands have drained for decades. He questions the benefit to his property from the proposed works and is of the view that the costs should be the responsibility of the developer. He concedes that the works may be a benefit to the Ghesquiere property as it may increase in value as a developable property. He expressed concern that the development would actually increase the rate of runoff within the watershed thus making potential flood events worse. He confirmed his opposition to any costs that could be levied against his property.

Tom Thompson, Assessed Landowner

Mr. Thompson focused his comment on Branch A only. He is fully in favor of the work being carried out as soon as possible. He contends that the existing road ditch on the south side of Decou Road is inadequate and unable to provide effective drainage to the road or the adjacent lands. He contends that his property is being damaged by the poor condition of the drain. While he appreciates the efforts of Norfolk County to carry out maintenance works on the road ditch, he believes that the efforts are ineffective and total replacement of the system must be undertaken.

Findings

No evidence was put before the Tribunal to suggest that the works recommended for the construction of Branch A and Branch B as described in the report was not required and such was not the subject matter of the Appeal.

Neither was any evidence or argument raised that opposed the assessment of the construction cost for Branch A of the drain, which assessment the Appellant appears to support. The Engineering Report clearly identifies the basis of this assessment as a negotiated agreement between Norfolk County and the developer of the Dream Villa lands. Despite their own expert, Mr. Kuntze, stating that it is “not proper to determine an assessment … using a private agreement between owners” and their witness, Mr. Mayes, referring to it as a “political decision”, Norfolk County and in particular the Roads Department accept the Branch A assessments. The Tribunal is satisfied that the Dream Villa lands will certainly receive a significant benefit from the construction of this drain and is properly assessed under Section 22 of the Drainage Act. Similarly, the Tribunal is satisfied that, given Norfolk County has agreed to pay the remainder of the project cost of this branch, it may be assessed under Section 24 as a Special Benefit. Clearly, Norfolk County and the developer were willing to accept costs that, under normal circumstances, would have been assessed in benefit and outlet liability against all lands and roads affected by the construction of Branch A. A clear example of this would be the Thompson property that is in need of the drain would be positively impacted by it and should contribute to it. The engineer was correct in identifying all other properties affected by this work in the Schedule of Assessment and levying an assessment of zero dollars against each property. Therefore, the Tribunal finds no ground on which to overturn the assessment of the capital cost of Branch A.

The assessment of capital cost for Branch B is a different issue. It appears from the evidence that the engineer applied the same logic to the distribution of cost for Branch B as was applied for Branch A. However, there was no agreement on the part of Norfolk County or the Dream Villa developer to absorb any portion of the cost that reasonably should have been assessed to other properties directly or indirectly affected by the work. The appeal by Norfolk County against their assessment for Branch B is appropriate. There is no doubt the construction of Branch B will offer a significant benefit to the directly affected properties both practically and in law. The argument that the Demeyere property is not beneficially impacted by this work is poorly founded. The argument that the lands within the Branch B watershed that will collect and discharge water into this drain are not liable for any Outlet Liability assessment is also rejected. The testimony of Mr. Mayes and Mr. Kuntze as to the inequity of the assessment of capital costs levied against Norfolk Street South is largely accepted. The Tribunal finds that the Schedule of Assessment for Branch B must be completely revised to include appropriate assessments for Benefit and Outlet Liability against all lands so affected.

Mr. Kuntze suggested that the engineer should consider a Benefit/Outlet cost split more heavily weight toward Benefit (90%). The engineer used a weighting of 100% Benefit which the Tribunal rejects. The Tribunal directs that the engineer must use his best judgment to accurately identify and equitably distribute that benefit assessment against all properties so benefited by the work. The Tribunal will not direct the engineer how to carry out his duties under the Drainage Act but suggests he should consider the comments of Mr. Kuntze with respect to a Benefit/Outlet split. All Outlet Liability assessments must be developed based on common practice in the industry and be levied under Section 23.

The evidence of Mr. Mayes and Mr. Kuntze regarding the apparent inequity of levying 100% of all future maintenance costs for Branch A and Branch B against Norfolk County is accepted. While the Tribunal appreciates the argument from the engineer that the proposed works are largely an urban storm sewer, the reality is that a significant portion of the flows carried by this drain will originate from agricultural or undeveloped lands. At some point in the future, when the entire watershed becomes developed, it may be prudent for Norfolk County to abandon the drain under the Drainage Act and incorporate the scheme into their urban storm sewer system. However, until that time, a more equitable distribution of maintenance cost that is more associated with the actual use of the drain is necessary. The Tribunal finds that the Schedule of Assessment for Maintenance for Branch A and Branch B must be revised to more equitably reflect the use made of the drain and the owners’ responsibility in cost to maintain it.

The extent of the revisions to the report generated by this decision will result in many property owners now being assessed. Given that this represents a substantial revision to the report and the Tribunal finds that the report must be referred back to the engineer, revised, filed with the clerk and dealt with in the same process as the original report. Owners must be given an opportunity to voice their concerns, if any, to Council through a public process that includes the Court of Revision.

The Tribunal notes Mr. Smith’s comments that the works may have a potential impact on private water wells, which is an issue that was not identified in the report nor was it the subject of this appeal. The Tribunal finds that the works should proceed as designed. However, given that this issue has been raised and that the report is being referred back to the engineer, the revised report should also include some provision for impacts on private water wells if the engineer believes this is an issue. Should impacts occur, the report should clearly identify, for the protection of all parties, exactly what is to occur and who should pay any increase in construction costs arising from remediation works.

Concern has been expressed by Mr. Thompson that the project has been delayed for some time and needs to proceed. The Tribunal is sympathetic to his concerns and recognizes that referring the report back will further delay the project. However, it is necessary that the public have all opportunities offered under the Drainage Act to respond to this revised report.

Norfolk County has expressed concern regarding the cost related to this appeal and the costs associated with the needed revisions to the report. No evidence was offered to suggest that the engineer was negligent in preparing the report or in his dealings with Council. The Tribunal finds no grounds to levy any cost against the engineer or set a cap on subsequent costs for revisions to the report. However, Norfolk County is directed to Section 72(1) of the Drainage Act to take action should they believe it necessary.

Order of the Tribunal

The Tribunal therefore orders that:

1. The Report prepared by T. Gregory Smith and dated July 18, 2014 for the Decou Road Drain is to be referred back to the engineer for the purposes of re-assessment for Benefit and Outlet Liability on Branch B.

2. The Report shall include provisions for the distribution of future maintenance cost that more equitably recognize the use made of the drain by the lands in the watershed.

3. The Engineer shall review the impacts of the drainage work on well water and, if necessary, include provisions in his revised Report for any additional costs associated with mitigating any impacts on local wells.

4. The engineer shall file a revised report to Norfolk County no later than 4 months after the date of this decision and that Norfolk County proceed with the required process under the Drainage Act immediately upon receipt of the revised report.

5. The non-administrative costs of the Town incurred with respect to this appeal including the Engineer’s fees and expenses for preparing the original Report and the revised Report, as well as, the Engineer’s fees and expenses for attending and participating in this hearing, shall form part of the cost of the drainage works.

6. There shall be no further Order as to costs; all parties shall be responsible for their own costs of participating in these proceedings.

Dated at Windsor, Ontario this 9^th^ day of July, 2015