On the rise

Council discusses rate increases for water users

Water and wastewater were again a hot topic at last Wednesday’s Committee of the Whole. The report was seeking direction on the 2022- 2027 rates that would take effect on January 1, 2022. Public consultation was completed to gather the community’s feedback on the rate scenarios and bring the results back to Council before the adoption of the rates study. A Have Your Say page launched in late September included background information on the rates decision. The public survey had only 118 responses. A Virtual Town Hall took place on October 6 with senior staff from Finance, Water/Wastewater, and Development Services, and was posted on YouTube. It was viewed only 65 times. The report states that it was clear respondents had two major objectives. To have full cost recovery of future capital costs by the year 2030 and to have tourism pay for impacts on the water and wastewater systems.

Staff are suggesting a scenario which sees a full life-cycle cost recovery in 10 years, as well as increased rates during the summer months. The other scenario would have seen a full life-cycle cost recovery in 14 years.

Councillor Kate MacNaughton wanted to return to the discussion of providing a relief program to water users who struggle to pay their bills. The trick was figuring out where the money would come from. Director of Finance Amanda Carter explained that a relief program had been considered, but it ultimately just drives rates higher. “We did consider a relief program, but the effect on the rates would have been that the rates increased to afford that kind of cost within the plan. It’s suggested during the rate study that that type of program be tax supported and brought forward during budgetary process,” said Carter.

CAO Marcia Wallace added that while possible, such a program is currently unfunded, and the most likely place to find the money would be to increase taxes, or cut something else from the budget. “Right now it would have to be taken from the tax base in order to support it. There is not room in our current operating budget to absorb that,” she said.

Councillor Bill Roberts wondered if a waterworks commission, which has been talked about in depth in this newspaper, would be a good approach. “There has been a lot of discussion around the idea of a user-focused water wastewater ratepayer commission or authority of some sort. I am wondering if this is now the time for us to give that some serious consideration, especially if we are moving into policy direction,” said Roberts

Carter acknowledged that staff had discussed such a commission, but the fact that most of the cost comes from capital projects and not from the operation of the system, led to the conclusion one was not needed. “We did discuss this as a group and we picked apart the last review that was done and focused on the capital, which is really driving the costs of this plan. The fact that we have five water systems and two sewer systems doesn’t help the situation in terms of our capital infrastructure and what we have to look after. Due consideration was given to the entire capital 20-year outlook. Growth projections were looked at and what we provided to Watson’s is, in our opinion, accurate,” said Carter. CAO Marcia Wallace agreed, and recommended that any change of the governance be a longer term solution and not impact the ability to get water rates set for January “The capital constraints is the driver of this. Our operational costs are not making a dent in the cost increase. It’s all about capital and there are a number of initiatives and works going on to see if we can drive down some of those costs over the next few years, so when we are back here in five years doing the next rate study, hopefully we have some better news to share.”

Councillor Janice Maynard was also wary of a commission. “If the idea of having a commission is to find savings in your operations, we know from what we have in front of us that is not the large part of a significant part of the issue with our rates. A commission in fact would likely add additional costs,” she said.

Councillor Ernie Margetson asked for an explanation as to the motivation to go with the shorter term cost recovery instead of the longer term. Carter explained it was cheaper in the long run. “It’s really driven by the fact that it is a cheaper plan because there is not as much debt servicing impacting the rate. Going out over the 14 years, you have more debt that’s undertaken and those debt payments impact the operating budget, which ups the rate required,” said Carter.

Margetson then wondered what would happen if in the next five years capital projects cost more than expected.

Wallace explained there is a practical element as well as a strategic element in the decision. “It’s a cheaper plan. And frankly, we had a really low response rate on the survey, so it seemed worrisome to rely on just a few people instead of picking something that would keep the rate marginally lower,” said Wallace. “As a leadership team, we are doing a number of pieces from an asset management perspective. We are looking at a regional servicing strategy. Looking at Wellington’s development, but broader. We have an ongoing discussion with Belleville where we purchase water for Rossmore Fenwood, and then we are proposing in the 2022 budget a Master Servicing Plan for the Picton area given all the growth we are seeing there over the next 10 years. To incur the debt now for something that may change didn’t seem like the wisest decision,” explained Wallace.

Councillor Mike Harper liked the idea of seasonal rates, and tried to break the increase down into simpler terms. Harper explained that for most users, the base rate would increase about $2 to $3 bi-monthly, and consumption rates only increase around 20 cents per cubic metre. “The idea of a seasonal rate makes a lot of sense to me. First of all, I think we have declared a climate emergency. We need to think about water conservation. We need to rethink what and how we use our water. It won’t be popular, but we need to look at watering lawns and creating big gardens and whether that makes sense in today’s world,” said Harper. “The lion’s share of the bill is the base cost, so the impact of seasonality is relatively small because that portion of your bill is the consumption, and that’s a small portion.”

Speaking on behalf of rural water users, Councillor Andreas Bolik warned that Council could be heading down the path of a rural-urban feud if not careful. “There isn’t just six water systems in the County. There are thousands. Every rural resident has a well and septic and they pay for that directly out of their pocket. And that’s not cheap either. As far as relief for those that are on the water systems, if that comes from tax money, now we are telling rural residents they are going to be subsidizing those people in the urban developments and I don’t think we want to go there and cause more of a rural and urban divide,” he said.

Council approved the five-year rate change and also directed staff to report on a relief program for lowand fixed-income taxpayers who may need it. The bylaw will go to council’s December 14 meeting.