Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West, 2nd Floor NW
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West, 2e étage NW
Guelph, Ontario N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca
Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Courriel: AFRAAT@ontario.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL:
South Innisfil Creek Drain Improvement (RE) Municipality of Innisfil
South Innisfil Creek Drain Improvement
STATUTE:
Drainage Act
HEARING:
July 23-24, 2019
DATE OF DECISION:
October 22, 2019
003SouthInnisfilCreekDrain19
NEUTRAL CITATION:
2019 ONAFRAAT 23
SOUTH INNISFIL CREEK DRAIN IMPROVEMENT
Municipality of Innisfil
IN THE MATTER OF THE DRAINAGE ACT, R.S.O. 1990, CHAPTER D.17, AS AMENDED,
AND IN THE MATTER OF: Appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal by:
- Succession Financial Group Inc., of Toronto, Ontario, represented by Marc Kemerer, Devry Smith Frank LLP, under Section 48
- Diane Hogarth of Churchill, Ontario, under Section 54
- Mary Toich of Cookstown, Ontario, under Section 54
- Kerry Yamamoto of Churchill, Ontario, under Section 48
- George Kemeny of Cookstown, Ontario, represented by Mike Kemeny under Section 48
- George, Mike and Bill Kemeny of Cookstown, Ontario, represented by Mike Kemeny under Section 48
of the Drainage Act, with respect to the South Innisfil Creek Drain 2019 Improvement in the Town of Innisfil.
Before:
Harold McNeely, Vice-Chair, Jim McIntosh, Vice-Chair, and Lee Holling, Member
Appearances:
Paul Courey, counsel for the municipality Jeff Dickson, P. Eng., author of the report Marc Kemerer, counsel for Succession Financial Group Inc. Nick Torkos, President and General Manager, Succession Financial Group Inc. David Bonsall, P. Eng., witness for Succession Financial Group Dianne Hogarth, Appellant Mary Toich, Appellant Kerry Yamamoto, Appellant George and Mike Kemeny, Appellants John Kuntze, P. Eng., on behalf of Boris Horodynsky
DECISION OF THE TRIBUNAL
Background
The Tribunal held this hearing in the Town of Innisfil on July 23 and July 24, 2019 in the council chambers located at 2101 Innisfil Beach Road, Innisfil, Ontario. The South Innisfil Creek Drain 2019 Improvement report (“Report”) was submitted by R.J. Burnside and Associates Limited (“R.J. Burnside” or “Burnside”) and was signed by J.R. Dickson, P. Eng. (“Mr. Dickson” or “Engineer”). The Report is dated February 13, 2019.
Appeals had been filed under section 48 of the Drainage Act (“the Act”) by Succession Financial Group Inc. (“Succession Financial”), Kerry Yamamoto, and George, Mike, and Bill Kemeny. Diane Hogarth and Mary Toich had filed appeals under section 54(1) of the Act.
The Town of Innisfil provided staff who performed the role of Clerk of the Tribunal.
Preliminary Matters
There was no dispute that the parties have standing. There was no dispute that R.J. Burnside had authorization to prepare the Report.
On July 12, 2019, the Tribunal received a report authored by Nic Keast, P.Eng,. from Greenland Consulting Ltd, a firm of engineers retained by 1665328 Ontario Ltd, an assessed landowner identified in the Burnside report. The Greenland Report had also been provided to the Town of Innisfil and the appellants. Nic Keast was present at the hearing. He explained that the landowner is in the early stages of planning a commercial development on the assessed lands and that he had only been recently retained to assist in this development. Counsel for the Town of Innisfil objected to the Tribunal receiving the report in evidence because the landowner had not, until July 12, responded to, or commented on, the Burnside Report or participated in any of the meetings convened by the Town or by Burnside. He stated the submissions by way of the report filed with the Tribunal were premature and that the landowner should pursue this commercial development project by entering into discussions with the Town of Innisfil and submitting an application to the Town for approval of its development. After considering Counsel’s objections and the comments of Nic Keast, the Tribunal declined to receive the Greenland Report in evidence for the reasons submitted by the Town’s counsel.
Overview
Jeff Dickson, P. Eng., was qualified as an expert in drain design and construction and was sworn in to testify.
Mr. Dickson indicated that other staff from R.J. Burnside had worked on the file under his direction and would be available to answer any questions for the Tribunal as required. Don McNalty, P. Eng., had been assigned full-time to the project, although Mr. Dickson was the author and had signing authority for the report.
In June of 2016 R.J. Burnside were hired to design improvements to the existing South Innisfil Creek Drain. Previous work on a drainage report had been completed by Dillon Consulting Limited (“Dillon”) in 2005 as part of their preliminary report and in 2011 in preparation of the Dillon Final Report.
R.J. Burnside used as much of the Dillon information as possible including the information from the onsite meeting. Burnside did not hold an onsite meeting. At the request of the Municipality, Burnside formed a Public Liaison Committee (“PLC”). The purpose of the PLC was to provide a forum for agencies and the assessd owners to provide input and feedback in an attempt to find a solution to the drainage needs while meeting the requirements of the various agencies in relation to regulatory and environmental issues.
Burnside resolved agency concerns through design of the drain as well as by providing construction specifications. They had three public meetings as well as numerous meetings with owners. Burnside submitted a draft report in August 2018 and the final report in February 2019. The court of revision sat in March 2019. Department of Fisheries authorization was received in July 2019.
The watershed area is approximately 8,021 hectares (ha) of which 280 is urban. There is 14,460 meters of drain which includes branches and 9,900 meters of main drain.
The South Innisfil Creek Drain was originally created by report in 1903. A second report was prepared in 1956 by D.H. Weir, P. Eng.
Mr. Dickson explained that an area was chosen based on the 228 contour as lands which are predominately market garden farm lands. These lands are generally flat muck- type soils and will received much needed improved drainage if the project proceeds. This area is subject to a special assessment, which has been called the “flood reduction assessment” and is levied at $1,000 per ha. on an equivalent area basis. Lands within the 228 contour area that are Provincially Significant Wetlands (“PSW”) are exempt from the levies.
For the drain to function as designed, the Ministry of Transportation (“MTO”) will need to make improvements to the Highway 400 crossing of the drain. There is one undersized culvert which appears to be near the drain invert and two larger relief culverts which are approximately one meter above the drain invert. The perched condition of these culverts causes a capacity problem and even if all other works on the drain are performed, little benefit will be realized until such time as MTO replaces the culverts under Highway 400. Some of the considerable correspondence between MTO and the municipality has been provided in the Report. MTO has indicated verbally that if a report is approved and all appeals are exhausted, they will then initiate the replacement of the culverts. MTO indicated that this could be done in three years.
Mr. Dickson explained how R.J. Burnside used the Todgeham method of calculating the assessments and explained how he arrived at benefit and outlet portions of the costs.
Mr. Dickson indicated that the drain has often overflowed in the recent past and as such there is some urgency in getting the work done as quickly as possible. The design storm which was used for the report was the two-year storm plus an allowance for climate change and a freeboard allowance. This is the standard currently recommended by various government agencies.
Mr. Dickson submitted two memorandums requesting amendments to schedules of his report where errors had been found. On Schedules D5, D7, D9, D11 and D13 the titles “wetland area” and “bush area” need to be reversed to be correct. On appendix B and D, land owned by 1409563 Ontario Inc. was incorrectly assessed and should be revised accordingly. Mr. Dickson indicated that the owner is aware of the proposed change and is not objecting to the change.
The Engineer submitted his analysis of the section 54 appeals prior to the appellants and for ease of understanding these comments are grouped under each appellant’s testimony.
Diane Hogarth, Appellant
Dianne Hogarth was the first appellant heard. The Engineer indicated that her property was in the Hamlet of Churchill and outlets through storm sewers into the drain. Her property is 0.47ha and has been assessed $50 for benefit, $250 for outlet and $13 for her portion of the Dillon costs. The costs for the Dillon work that could be used for this report were charged on an equivalent area basis to all landowners within the drain. Appendix B6 in the report shows the breakdown of those costs. Less than 20% of the Dillon costs were assessed against the land owners, the balance being assessed against the Municipality.
Ms. Hogarth indicated that she has lived in the area for 33 years and has been actively involved with a landowners committee which opposed the Dillon report. She provided the panel with history of events from 2002 until present. This history included numerous complaints about flooding including a Drainage Referee judgement for damages against the municipality as a result of the lack of maintenance. It was her opinion that the Municipality should be assessed the bulk of the costs since most of the issues were a result of the lack of maintenance by the Municipality. Ms. Hogarth agreed that her land did outlet into the drain.
Mary Toich, Appellant
The second appellant was Ms. Mary Toich. She asked that Diane Hogarth be allowed to provide her information to the Tribunal on her behalf because English is her second language. This was allowed by the Tribunal.
Mr. Dickson provided an overview of how Ms. Toich’s assessments had been derived. Her land is within the flood reduction area below the 228 contour and was assessed $1,000 per ha for that as well as outlet and a Dillon portion of the assessment on an equivalent area basis. She had also been assessed a direct benefit as well.
The concerns of Ms. Toich, expressed by Ms. Hogarth, are that her assessment is too high when compared to people who were assessed on the Holland Marsh project as well as when compared to the assessment of her neighbor, 1409563 Ontario Ltd. Her assessment was less in the Dillon report as well. She also believes that most of the drainage issues have been caused by sedimentation which occurred as a result of lack of maintenance.
Ms. Toich acknowledged that her lands outlet into the drain and that she has a market garden in the flood benefit area.
George, Mike, and Bill Kemeny, Appellants
Mike and Bill Kemeny came forward to express their concerns about the assessment and their belief that their lands drain without the need for any major improvements.
Mr. Dickson indicated that the Kemeny land consists of market garden lands and some PSW. The market garden land had been assessed $1,000 per ha for flood improvement and had been assessed on an equivalent area basis for outlet and for its share of the Dillon information. No flood improvement assessment was charged against the PSW portion of their land. The equivalent area also takes into consideration the PSW.
Mr. Kemeny believes that their land will not receive any benefit from the drain improvements but acknowledges that the land outlets to the drain. Although most of his land is within the 228 contour, he does not believe they will receive any special flood relief and should not be required to pay that component. It is his opinion that development has increased run off and reduced storage, creating the need for this project. The project is too big and more expensive than required and they would like their assessment reduced.
Kerry Yamamoto, Appellant
Kerry Yamamoto was the fourth appellant. In his submission he indicated that the major problem was with the culverts under Highway 400. Mr. Yamamoto acknowledged that his land outlets into the drain and is in the market garden area and therefore subject to the special assessment. He believes that work on the culverts needs to be done before the drain can be improved, or flooding may result. Although he would like to pay less, he acknowledges that the breakdown of assessments appears fair.
John Kuntze, P.Eng.
John Kuntze, P. Eng., was accepted as an expert witness in drain design and construction and was called by Mr. Courey, counsel for the Town of Innisfil. Mr. Kuntze indicated that he had been hired by Boris Horodynsky, a gentleman who owns significant properties within the drainage area, many of which are market garden sites. His client is the owner of 1409563 Ontario Inc. and has instructed Mr. Kuntze that he is satisfied with the proposed amendments to the Appendices as outlined earlier.
Mr. Kuntze was hired in 2014 to help work towards a solution to the drainage problems his client was experiencing. Mr. Kuntze is not connected to R.J. Burnside in any manner. He has attended many meetings, provided input to a steering committee and reviewed reports by R.J. Burnside as well as the ones prepared by Dillon. Mr. Kuntze agrees with the method of assessment and believes that they are fair and reasonable.
Succession Financial Group Inc., Appellant
Representatives of Succession Financial were not present on the afternoon of the first day of the hearing. To ensure that adequate time would be available to complete the hearing on the second day, Mr. Courey agreed to have Mr. Dickson testify first provided he could be recalled after the experts from Succession Financial had made their case the next day. This allowed the Tribunal to proceed and complete the hearing without the potential for a delay associated with rescheduling a day for testimony.
Mr. Dickson explained how he had determined the assessment for the Succession Financial golf course lands which included a flood reduction benefit as well as outlet, benefit and the Dillon portion. Mr. Dickson also explained how he had developed allowances for the golf course lands. This is the area of the disagreement.
The appellant disagrees with the amount of money allocated for loss of access. On the appellant’s land there are four bridges which cross the drain to allow for play and to allow for access for maintenance. Mr. Dickson provided his opinion that only one bridge should be provided for in the Report and that the provision should be an allowance, as the other land owners on the drain should not be held responsible for the cost of private crossings.
There are two issues involved in this appeal. One, the value of the allowance on a per bridge basis and secondly, the number of bridges that should be assessed against other owners on the drain.
Mr. Dickson is of the opinion that only one access should be funded by the drain, as none of these bridges were built under the previous report and were the responsibility of the golf course owner.
Mr. Dickson determined the cost of the bridge by consulting with R.J. Burnside’s in-house specialists as well as by comparing those estimated costs with the reported cost of a structure by an upstream land owner. Mr. Dickson then took that amount and reduced it by the allowance for loss of land and then determined that one third of the bridge cost should be assessed to the golf course. He did not believe the foundation costs would be extensive as these are seasonal crossings. Mr. Dickson indicated that the total cost of the structure would be approximately $90,000 and that once he reduced the cost by the land lost and by one third, the actual allowance provided would be $41,600.
Mr. Courey called Mr. Kuntze to give his opinion in relation to allowances for severance. Mr. Kuntze’s experience has been that an allowance is usually provided for a bridge and the owner can decide if they want to spend the money for a bridge or keep the allowance. Additional crossings can be considered, but would be assessed entirely to the owner of the land requesting them.
Mr. Kemerer, counsel for Financial Succession, called two witnesses. Nick Torkos is the President of Succession Financial Group Inc., which owns the golf course. He explained to the Tribunal how the course operates and the need to have multiple crossings for ease of safe play. Mr. Torkos explained that the land is designated and zoned commercial and as such is not a farm property and needs more than one access. Two of the bridges along the drain are for golf cart use and maintenance only, while the other two also carry water and hydro lines across the drain. He also indicated that the golf course had complied with an order in 2006 to raise the bridges. Under cross examination, Mr. Torkos indicated that he had not looked at the previous reports to determine the status of the structures before purchasing the course. The bridges were in place when Succession Financial purchased the site.
Mr. David Bonsall, P. Eng., was called to testify and was accepted as an expert in bridge design and construction. He acknowledged that he had not prepared a report under the Drainage Act. Mr. Bonsall submitted a report which had very similar values for the bridge as did Mr. Dickson. Mr. Bonsall’s report differed in that it included $50,000 for foundations at each of the four bridges as well as allowances for permitting contingencies, etc. The total cost for all four bridges including foundations, removal, engineering and contingency was $525,000. The two larger bridges are expected to cost approximately $137,500 each and the two smaller ones approximately $125,000 each.
Neither engineer provided comments on the condition of the existing bridges or could provide an indication as to whether or not the existing bridges met current design standards.
Discussion and Findings
The Tribunal accepts the evidence of Mr. Dickson, the engineer who prepared the Report, in the matter of appeals under section 54. The Tribunal believes that the Engineer was fair and reasonable in allocating assessments. All of the appellants acknowledged that their lands outlet into the drain. Previous issues of lack of maintenance have been subject to various decisions of the Drainage Referee and have been dealt with by those decisions. The Engineer has been fair with the method of charging for the information available in the Dillon report.
In relation to the section 48 appeals filed by Kerry Yamamoto and by Bill Kemeny, George Kemeny, and Mike Kemeny, the Tribunal believes the that the works do provide benefit in relation to estimated costs and that the allowances are adequate. The Tribunal agrees with the concerns of Mr. Yamamoto that the culverts under Highway 400 will need to be improved before any benefit can be derived from the drainage improvements and that there may be a risk of damages occurring if the drain is improved prior to the improvements being made under the highway.
Succession Financial’s appeal is a much more difficult issue. The Tribunal believes that Mr. Dickson has made reasonable efforts to determine the cost of a bridge. His report should have provided an outline of his methodology for reducing the cost allowance from $90,000, his estimated cost of the bridge, to $41,600, the allowance he provided. If such an explanation exists, it was not apparent to the appellants and was not entered into evidence at the hearing.
The Municipality and the owner need to be aware of municipal drains when a land use changes from agricultural to commercial. It is not fair for upstream owners to be expected to pay for multiple drain crossings, nor is it desirable for a commercial owner to be expected to spend significant funds to maintain their drain crossings when a drain is expanded. If adequate grade had existed, then the solution would likely be to relocate the drain around the golf course.
It is the opinion of this Tribunal that only one bridge should be funded by the assessed owners of the drain. In this circumstance, the Tribunal is of the opinion that the reductions of the bridge cost for land loss and for drain location are not justified. In other circumstances such adjustments may be reasonable. The engineer for the appellants had the opportunity to research in more detail the cost of crossing the drain, and as such the panel are in agreement with that estimate of $137,500 for the larger crossing. HST will not be added to the cost of the structure. The appellant operates a business which is eligible to recover from the Canada Revenue Agency any HST paid to third party suppliers of services and materials. HST should not be considered an expense charged to the drain.
The Tribunal agrees with Mr. Dickson that the bridge costs should be shown as an allowance and not further encumber the landowners on the drain with ongoing inspection and operating costs associated with a structure which serves the public. All maintenance including future replacement shall be the responsibility of the land owner. Should the land owner wish to install numerous bridges on the drain, it is cautioned that the land owner will need municipal approval. Mr. Dickson indicated that such approval will not be withheld unreasonably.
The Tribunal is concerned about the status of the MTO crossing. The ability for the drain to function as designed hinges on the culverts under Highway 400 to be upgraded and lowered as shown in the Report. At the hearing it was mentioned MTO had verbally agreed to have the outlet under Highway 400 improved within 3 years. There is nothing in the written correspondence to confirm that MTO will improve the crossing as required in a timely manner. It is recommended that the Municipality get this in writing before starting any construction and, if necessary, seek approval to proceed with the work on behalf of MTO.
At the conclusion of the hearing, the panel determined that it was in the best interests of all parties to obtain comments from MTO in relation to the timing of improvements to the culverts under highway 400. The Tribunal issued the following order to the Ministry of Transportation of Ontario on August 21, 2019:
Preamble
The Hearing of these Appeals was held on July 23 and 24, 2019.
At the Hearing, the Tribunal received in evidence
a. the report of J.S. Burnside and Associates Limited (the “Report”)
b. the evidence of Jeff Dickson P. Eng., and other witnesses.
Property owners identified in the Report are affected by flooding of their properties, which flooding could be alleviated by improvements to the South Innisfil Creek Drain recommended in the Report.
The evidence establishes that unless the Ministry of Transportation (“MTO”) makes improvements to the Highway 400 crossing (culverts) of the Drain, the Drain as designed will not function.
The Tribunal was also informed at the Hearing that MTO had indicated verbally that if the Burnside report is approved, and all appeal rights are exhausted, it would then initiate the replacement of the culverts within three years.
Before issuing its decision, the Tribunal wishes to notify MTO of its inclination to require MTO to make the improvements to the Highway 400 crossing and to allow it to make representations.
Order of the Tribunal
The Tribunal orders as follows:
By September 23, 2019, MTO shall serve on the Appellants and the Parties identified in the Appearances section of this Order and file with the Tribunal its written representations on the evidence as summarized in the Preamble.
By September 23, 2019, MTO shall provide its submissions to the Tribunal’s inclination to order MTO to carry out within three years from the time that the Report is approved, and all rights of appeal are exhausted, the improvement to the Highway 400 crossing, which will allow the Drain to function as designed.
On September 19, 2019 the Tribunal received the following response from MTO:
Order of the Tribunal
The Tribunal hereby orders the following:
That the appeals by Diane Hogarth, Mary Toich, Kerry Yamamoto, and George, Mike and Bill Kemeny be dismissed.
That the Engineer be instructed to amend the schedules as outlined in the two memorandums submitted to the Tribunal.
That the appeal by Succession Financial Group Inc. be allowed in part by adjusting the allowance for loss of access from $41,600 to $137,500.
That the non-administrative costs of the Municipality incurred with respect to these appeals shall form part of the cost of the drainage works, and such costs shall include the Engineer’s fees and expenses for revising the report.
There shall be no order as to costs and each party shall be responsible for their own costs.
Dated at Ottawa, Ontario this 22nd day of October, 2019.