Nakusp residents will see a hike in their water and sewer rates this year. The proposed increases brought to the table during the last council meeting on Jan. 14 were 10 per cent for sewer and five per cent for water. Water and sewer classifications have also been given a general overall review, and changes to the rate structure are to be put into place before the rates are set for 2013.
Although it has been acknowledged that a complete review of the rate structure should not be completed until the outcome of the CBT WaterSmart program (e.g. assessment of the feasibility of water metering) is determined, it is still prudent to give a general overview of the rate structure.
Discussion about the change in rate structure and the increase covered a lot of ground and addressed issues ranging from the state of the economy to the necessity of building up reserve finances.
Starting off with the changes in rate structure, Chief Financial Officer Rob Richards brought up the fact there has been an issue keeping water and sewer rates consistent. Having done research in tandem with Public Works, the CFO explained there were 780 accounts but 1,700 services billed in the Village system.
Some situations where a discrepancy was discovered in the course of research, such as instances where either water or sewer weren’t being charged, have been rectified, and billing will reflect the correction of those errors, the CAO told council.
Typically the ratio between water and sewer in Nakusp is that for every $120 charged for water, $100 is being charged for sewer, the CFO explained. Category rates were examined and brought into line with this ratio.
Changes to categories for water and sewer rates were proposed, such as structuring rates for water-intensive businesses, to reflect the realities of usage. For instance, rates will be based on the number of washing machines in a laundromat or bays at a car wash rather than charging a basic laundromat rate.
Some new categories will be created to increase the accuracy of billing, while others will be collapsed where different categories are redundant.
CAO Tynan said the structure changes are also meant to bring consistency to the rates charged for water and sewer.
“We’ll be able to get more information in the future and refine it again,” said Tynan, with an eye to new data which will become available in the future through programs like the CBT WaterSmart initiative.
Swimming pools came up, as did the question if anyone was actually paying the $239 fee.
“A lot of these categories we will be following up on,” said Tynan, who acknowledged that the Village needed to work with building inspectors and staff out in the field to discover what was in fact out there.
Council voted to approve the proposed changes to the structure of the water and sewer rate classes.
Bandying increases about
Next, mayor, council and staff tackled the issue of increases to water and sewer rates, with the suggestion from staff being an increase of five per cent for water and ten per cent for sewer.
Facilitating the discussion, CAO Linda Tynan highlighted four issues as important and worth clarifying.
First, Tynan discussed the difference between water or sewer rates and taxation. Money that comes from water and sewer charges go directly to water and sewer funds, and service the utilities directly including capital expenditure like treatment plants. Taxes, on the other hand, go toward a general fund that may pay for water- and sewer-related administration, but do not go directly to the utilities.
“Rates need to cover all of the operating costs as well as capital projects,” Tynan told council, “Historically across Canada water and sewer rates rates have not been high enough to replace pipes under the ground.”
As council is well aware, she pointed out, many leaks have been discovered in the municipal system, and ongoing maintenance programs are needed for both water and sewer.
“We need to determine what our reserves need to be to fix these leaks,” said the CAO.
Mayor Karen Hamling spoke up and said that it’s being pointed out at regional government meetings that the regulations coming down are almost unaffordable for communities and that the province and the feds need to aware of this when they’re setting these regulations.
Tynan said that aging infrastructure is also a major consideration, and that fixing old pipes isn’t a fun thing to fund but needs to be done.
The costs for completing the sewer treatment plant have affected both the water and sewer funds, impacting the building of reserves for maintenance and emergency costs and the financing of future projects like the Alexander Rd. water main upgrade.
“To have anything less than $500,000 in one of these reserves is a little bit scary,” said Tynan, who pointed to the potential costs associated with an emergency which are generally much greater.
Low sewer rates have also had an impact.
“It’s almost $100,000 less that we bring in from sewer than water,” noted Tynan, even though operating costs are catching up with water.
Hamling asked what an increase of 10 per cent for sewer and five per cent for water will mean in real dollars for taxpayers.
At 5.6 per cent and 9.2 per cent increases for water and sewer rates respectively, the average single family home will pay $42 more per year.
Councillor Joseph Hughes asked what the impact would be if the increases could be split more evenly over time, and Tynan replied any increase and how much is at the discretion of the council.
Councillor Ulli Mueller also found a ten per cent increase hard to stomach. “There are going to be other increases with regional district and other services, and it adds up,” she commented.
“We can’t work our figures on regional district, we’ve got to have the money to run our own services,” countered mayor Hamling. “We’ve gotten in trouble in the past doing that. It’s a balance we’ve got to find.”
Taxation, which pays for services, is different in that services can be cut if needed, but rates for utilities which pay for infrastructure maintenance as well as larger projects, can’t be neglected.
“I’m worried that we won’t be able to provide what we need to provide,” said Hamling about not approving the recommended increases.
Tynan said what needs to be done is to develop a long term financing strategy so planning purposes and greater clarity for the public about their annual rates. However, strategy should be planned once information about metering is available, which is imminent, the CAO said.
With counc. Mueller and counc. Hughes voting in opposition, the initial reading of the proposed rate increase of five per cent for water and ten per cent passed. A special meeting on Monday, Jan. 21 will be held for the final reading.
