Cost of water

Public to have input on rate increase options

Water and wastewater have long been a contentious topic in Prince Edward County, whether it’s inadequate water pressure, aging infrastructure, or just the high cost homeowners on municipal services must pay for the resource. The question often arises, “Why do the water rates have to go up at all, and why can’t they go down?” County staff presented the findings of a water and wastewater rate study at a public virtual town hall last Wednesday where residents also got the opportunity to submit questions in advance. The bad news, which won’t come as a surprise to many, is the cost of water in the County is going up at the start of 2022. By how much water rates increase will depend on what folks figure will work best for the community. With four proposed rate scenarios put forward, the County is seeking the public’s input on how the cost of water and wastewater rates should be financed over the next while. Water and wastewater rates are approved by the municipality every five years. With current rates set to expire on December 31, 2021, the new rates, once approved, will be in place for the period 2022 to 2026.

In a brief overview, municipal staff provided an outline on the process including a range of increases and financing models to cover future infrastructure investments, including tying rates to seasonal consumption and how the funding of capital needs works. Amanda Carter, Director of Finance, explained how the water rates structure has a base fee, charged on a monthly basis, and a consumption rate for the cubic metres consumed. “The base charge is normally used to support the capital infrastructure cost, and the consumption rate is used to support the operating costs for our six drinking water systems and two wastewater systems,” said Carter, who added the municipality does not have a lot left in its reserve funds. “When we say the capital requirement exceed any available funding, that’s exactly what we mean, we don’t have a lot of resources to draw from to fund our capital program and what we are seeing is heavy debt servicing.” The municipality is looking to raise $9 million annually to put aside for future capital water and wastewater needs.

Four water rate scenarios were presented for consideration (outlined in detail on the County’s Have your Say page). Each water rate scenario seeks to achieve full lifecycle funding, including full funding by 2030 (scenario 1), full funding by 2030 with seasonal rates (scenario 1a), full funding by 2034 (scenario 2), and full funding by 2034 with seasonal rates (scenario 2a). Scenario 1 provides the shortest time to full lifecycle funding, but sees rates increase year-round with the County taking on less debt. Scenario 1a is similar to Scenario 1, except users will pay a higher rate for water consumption in the summer (but will pay less than current rates for non-summer consumption). Scenario 2 provides the longest timeline to full lifecycle funding (meaning the municipality will take on more debt), but sees water rates increase more gradually. Scenario 2a is similar to Scenario 2, except users will pay a higher rate for water consumption in the summer (but will pay less than current rates for nonsummer consumption). “Our rate scenarios must factor in the large infrastructure investments we’ll make in the next two decades,” said Carter. “It is a best-practice to consider ‘full lifecycle funding’ of our infrastructure when setting rates and to start saving now to avoid costly surprises down the road.”

Supplying clean, safe municipal drinking water and wastewater services to the population of Prince Edward County is a cumbersome task, not only in terms of resources and infrastructure, where cost calculations involve a complex set of variables that include not just existing users (including the number and type of users), but projected population growth (housing growth too), and on-going replacement and upgrading of infrastructure needs. Geographically, Prince Edward County covers a large area, yet it has a relatively small number of users on its municipal drinking water and wastewater system to help pay for the services. Contributing to the high water rates the County endures is also the lack of large commercial and industrial water users, which usually brings down the overall cost to all users because of high consumption and large base connection charges. Garrett Osborne, Project Manager, Development Services spoke to growth projections in the County. “Based on the number of development applications currently approved, staff have determined how much new development will be constructed, and ultimately the water and wastewater infrastructure that will be required to support that development,“ said Osborne.

The current number of properties on water services in the County is 6,925, a number that is projected to grow to almost 11,000 by 2030; wastewater service customers currents sit at 5,500, projected to grow to almost 9,000 by 2030. It was noted that that some areas only have water services and not wastewater services, such as Bloomfield, Consecon and Carrying Place. “We do anticipate seeing a substantial increase starting in 2022, and a consistent steady growth over the next five years,” Osborne said. He also spoke to how development charges, which are collected from developers at the time they apply for building permits, are calculated based on predicted population growth numbers and which help pay for the cost of infrastructure that is required to support the new developments. “Essentially, the ultimate goal of development charges is to ensure that growth is paying for growth.”

The pipes that get the water to individual homes, and the pipes that take the wastewater away, as well as processing facilities and all associated infrastructure have a limited lifespan and needs to be replaced, renewed and upgraded on an on-going basis. For a small municipalities like Prince Edward County, the cost is enormous and has to be planned and managed over many years because, as with many municipality’s, the County’s water and wastewater infrastructure is aging and is in need of renewal. Don Caza, Director of Water and Wastewater Services, gave an overview of the water and wastewater infrastructure, noting the system, with its many facilities spread over a large area was in need of renewal. He noted in the past 15 years there has been a fair amount of investment in infrastructure with around 25 streets having had infrastructure replacement, including Picton Main Street. “We have been very proactive in our approach and. operationally, we have seen that in terms of how many water main breaks and other emergency situations, as that can cost a lot more money and are unplanned.”

Council will consider the four rate scenarios at its November 10 meeting. In the meantime, residents and rate payers are encouraged to visit the County’s Have your Say page at haveyoursay.thecounty.ca/water-rates which outlines the proposed rate increase scenarios and where the public can submit comments and questions. A survey (closes October 17) is also available online, at Shire Hall and at all library branches. County staff will be hosting in-person consultation pop-ups in Picton, Bloomfield, Wellington, Ameliasburgh, Carrying Place, Consecon and Rossmore on October 13 to 15 (details online). The virtual town hall held on October 6 on water and wastewater rates is available for viewing on the County’s YouTube channel anytime.