OCI and seal processor also receiving government payments
The amalgamated municipality of Trinity Bay North incorporated in 2005 and started to get overcharged on water usage in 2006, according to Municipal Affairs minister Steve Kent.
The harbour at Catalina, as captured in 2012. The community, along with Little Catalina, Melrose and Port Union — collectively the Town of Trinity Bay North — will receive a payment from the provincial government after being overcharged for use of the industrial water system. Payments will also be made to two of the largest water users from 2006 to present. — TC Media file photo
He recently spoke with The Telegram about an error in accounting, to be corrected by the provincial government this year. It involves over $600,000 in total charges to three parties — the town and two companies that once operated processing plants in the area.
The charges are related to use of one of the province’s few remaining industrial water systems. The systems were created more than half a century ago to support fish plants around the province and often extended to service area residents. Numbering about 35 at peak and divested over time, only six industrial water systems remain under the purview of the provincial government today, he said, with one of those servicing Trinity Bay North.
The system was installed in 1957 in Port Union, according to a 2005 study on shared services in the new municipality — including Catalina, Little Catalina, Melrose and Port Union. As with other industrial water systems, the Trinity Bay North system operates under a user-pays principle.
And yet users have paid more than necessary since 2006, leading to a March 6, 2014 provincial government decision to pay up and settle accounts.
“The industrial water system rate, which is the same rate charged to all users, has increased a number of times over the years and in 2006 the rate for the six operational systems was established at $1.46 per thousand gallons (of water usage), so here’s where the issue arose,” Kent said, when asked about the decision, an order in council available online.
“The Port Union system, which is one of the six that were operational in ’06, is the only system whose revenues exceeded its operational cost.”
The industrial water system rate, which is the same rate charged to all users, has increased a number of times over the years and in 2006 the rate for the six operational systems was established at $1.46 per thousand gallons (of water usage), so here’s where the issue arose. Municipal Affairs Minister Steve Kent
As a result, the users took issue with what they were being charged, starting a back and forth with the province.
“We were overcharging them,” Kent said.
“We’re pretty confident in the numbers, but when the discrepancy was discovered in the Port Union system we obviously wanted to make it right.”
The provincial cabinet has approved a settlement up to $380,582 for the town. Two companies are also approved for settlements: Ocean Choice International (OCI), which operated the shrimp plant in Port Union, and Atlantic Marine Products, tied to the Barry Group and once operating the Catalina seal tannery.
Ocean Choice International can recover $220,096, with up to $5,453 being paid to Atlantic Marine Products.
In 2011, the OCI shrimp plant closed for good after a year’s idling, while the seal tannery was last operated under NuTan Furs and closed in March 2012, once the Barry Group decided not to purchase pelts for processing.
“We’ve been working for some time to try and resolve the (water fee) issue,” Kent said, making a special note in the case of OCI.
“The resolution is not eliminating the arrears that are owed to the government by OCI. What it’s doing is reducing it to reflect the fact they were being charged amount in excess of the cost to government to operate the Port Union system,” he said.
Trinity Bay North mayor Don Burt was contacted for this story, acknowledging a resolution to the water fees was near. He declined further comment for now.