A proposed four per cent hike in rates for the Greater Vernon Water operating and capital budget has dribbled down to two per cent.
Greater Vernon Advisory Committee directors will make the recommendation on the hike and an overall proposed 2015 water utility operating budget of slightly more than $15 million to Regional District of North Okanagan directors for their consideration.
The overall capital budget is just over $5.5 million.
“The GVW’s long-term capital program requires significant investment for infrastructure renewal to replace aging infrastructure, expand the system to provide additional capacity and to improve water quality in meeting regulator standards,” wrote Stephen Banmen, RDNO’s director of finance, in a report to GVAC directors proposing a four per cent hike.
“While some uncertainty exists in terms of the Water Master Plan, it is known that there are significant investments required in the water system.”
Banmen said in his report “there is sufficient revenue at existing rates to meet the current operating needs of the system.”
He also had a couple of alternative rate proposals for directors to consider in his report: a 10 per cent hike which would provide an additional $1.1 million for future capital expenditures, in addition to the $736,000 currently proposed to be transferred to reserves.
The other alternative was a two per cent hike which would provide a minimal increase to reserves and provide some budget flexibility in terms of relocating resources.
City of Vernon director Bob Spiers and electoral area C director Mike Macnabb opposed the two per cent hike though for completely different reasons.
Spiers called for a zero per cent increase, but had no seconder to his motion amendment, while Macnabb thought a four per cent raise was fine.
“The increase we’re looking at is $940,000,” said Spiers. “Included in that is transfers to reserves of $736,000. The reserves now total $14 or $15 million. Those reserves are used in case of emergency, to flatten out rates of increase caused by emergencies, and replacing pipes. There’s enough money in there.”
Said Macnabb: “A status quo increase of two per cent essentially won’t get us anywhere. We have an incredibly large system. It has deficiencies in the infrastructure. The idea of adding some money to the reserves is to look after those potential problems…All the status quo does is put us into a holding pattern.”
Coldstream Mayor Jim Garlick and Coldstream director Doug Dirk called for the two per cent increase.
“We do have an infrastructure – I won’t call it a problem – but we have to deal with it,” said Garlick. “I don’t want to make everybody feel good saying there’s a zero rate increase and then feel good for a year.
“A few years down the road they’re not going to feel very good when we have water-flooded art galleries and stores. It’s important for us to move forward.”
Coldstream director Gyula Kiss was absent from the meeting but said via e-mail he would vote against the budget.
Among possible capital projects in the 2015 budget are a water main replacement along Highway 6 for $660,000, a $490,000 water main upgrade along Vernon’s Pleasant Valley Road and a $250,000 meter replacement pilot program.
