Council Votes 4 - 3 To Increase Water And Sewer Rates Effective February 1, 2023
By Robert Thomas
Calling it a necessary evil Council in a split 4 - 3 vote has voted to see your water and sewer rates go up in February 2023.
The approved increases will see water rates go up four percent and sewer rates go up three percent effective February 1st. The four percent water rate increase will not just effect customers in the City but also what the City charges to rural purchasers of water.
The reasons given for the need to increase rates is the cost of upgrades to the distribution system as well as the City’s share of upgrades at the Buffalo Pound Water Treatment Plant.
“As some of the others have said it is a tough time for everyone but the City is not immune to that. Unfortunately we have to pay the same increases as everyone has to pay, our water supply is going up, power supply is going up, energy supply is going up so we are not sitting here certainly to look for ways to harm the homeowners…as difficult a decision as it is it is necessary. In my opinion if we don’t find a way to fund these then we will have a shortfall year after year,” Councillor Jamey Logan said.
“...as difficult a decision as it is it is necessary. In my opinion if we don’t find a way to fund these then we will have a shortfall year after year. It is difficult but a necessity in my opinion.”
It was not an opinion shared by all of Council with Councillor Crystal Froese speaking out against the proposed increases due to the tougher economic times for many.
“We are living in really challenging times to be just an average taxpayer and that is one of my concerns as it was last year. And it is even tighter for people this year you know when you add up the fee for water, the fee for sanitary and the infrastructure levy you know if we add on the parks one (levy or flat tax) we are talking about $150 per month for people,” Councillor Froese said.
“There are a lot of people in our community who are struggling right now and that and I understand that the water rates are based on our infrastructure which is really important. And we are undergoing the biggest renewal we ever had but we are in difficult times. There are people out there who are challenged to pay their bills monthly,” she said.
“...we are undergoing the biggest renewal we ever had but we are in difficult times. There are people out there who are challenged to pay their bills monthly...”
“It would be nice one year if we didn’t have to have a water and sewer rate increases but I understand why we do. I understand in the past having to do nine percent so you know four percent feels easier than that but not easy at all, Councillor Heather Eby said, adding for many when they pay their water bill “they forget that it is not just paying for the water that drips out of their taps…but it is all of the infrastructure that goes along with it.”
“That as we know is a very expensive proposition,” Councillor Eby said.
She made the motions to raise rates as well the interest property owners pay to finance service connections through the City as it was necessary.
Councillor Dawn Luhning requested the motion be split into three parts - water rates increase of four percent, wastewater rate increase of three percent and the increase of financing water and sewer service lines through the City from four to seven percent annually.
The rate charged for financing through the City is periodically adjusted to match the interest rates charged by the banks. The rate is adjusted so as not to compete with financial institutions by being below the prime rate, finance director Brian Acker said.
Acker said the need for increases to water and sewer rates as well as increases to the cost to finance service connections was identified after the annual review of the utility.
The Utility is facing $86 million in capital renewal costs over the next five years along with debt repayment obligations on over $30 million in borrowing for past infrastructure work.
Reserves - the excess of revenues over expenditures - have a lion’s share of approximately $64 million to fund the capital programs planned in the water and sewer systems.
“That is why those increases of four and three percent are so important they do generate money to the bottom line of the utility and that goes directly to our capital expenditure programs,” Acker said.
Gas tax funding will also see $11 million flow into City coffers over the next five years with the use of the funds for capital projects set on an annual basis by Council.
Additionally $3 million from the general tax revenues is directed to the water and sewer (wastewater) utility.
It needs to be noted the water works will additionally generate a franchise fee of $660,604 and the sewer system will additionally generate a franchise fee of $468,574 for a total of $1,129,178 in franchise fees paid to the City.
The $1,129,178 in franchise fees for the two utilities generated in 2023 goes into the general operating budget.
The $100 infrastructure levy generates $1.678 million for cast iron water main renewal.
The City’s share of upgrades to the Buffalo Pound Water Treatment Plant is what is driving one percent of the increase sought on water rates above the increase for wastewater, he said.
Acker said that there would be a time where water rates would not have to go up to fund capital repairs and upgrades but that would only come in the distant future when “capital needs decreased significantly.”
The Votes
Increase the water rate by four (4) percent IN FAVOUR: Councillors Doug Blanc, Jamey Logan,
Heather Eby and Mayor Clive Tolley.
OPPOSED: Councillors Crystal Froese, Dawn Luhning and Kim Robinson.
Increase the sewage rate by three (3) percent IN FAVOUR: Councillors Doug Blanc, Jamey Logan,
Heather Eby and Mayor Clive Tolley.
OPPOSED: Councillors Crystal Froese, Dawn Luhning and Kim Robinson.
Increase the annual interest rate charged from four (4) to seven (7) percent for financing service connections: UNANIMOUS
The final rates still need to be approved as part of the final budget and then an amendment made to the Bylaw for water and sewer.