There’s a hole in our bucket

Council pushes waterworks rates sharply higher with more increases to come

It was just over four years ago the County imposed steep increases to water and wastewater bills. The municipality had just opened a $30 million sewage treatment plant on the escarpment overlooking Picton. It was staring at the prospect of replacing many of the town’s leaking pipes, as well as the intake pipe pulling water out of Picton Bay. That item alone would cost more than $1 million.

County waterworks and finance officials sat for weeks in 2010 with a mix of councillors and residents to examine every aspect of the County’s patchwork quilt of pipes and pumps that delivers water to approximately 3,800 addresses and takes the wastewater away from 2,000 homes and businesses.

The result was double-digit percentage increases to water bills, stretching out to the eight-year horizon of the plan. That would, according to the plan, put the waterworks system on a sustainable footing by 2012—meaning that users would, at last, be paying enough to fund the operation, and the renewal of the waterworks system.

FOUR YEARS LATER
But it now appears the plan has missed by a wide mark. Despite ever higher waterworks rates and connection charges, water and wastewater customers are only paying about three-quarters of the cost the system. The balance was being paid out of reserves. Now those reserves are empty.

Next year, the County will have to draw from a reserve account left over from the sale of the hydroelectric utility to Hydro One more than a decade ago. It’s not the purpose of this reserve to fund waterworks deficits—but the County is running out of options.

The upshot is that water and wastewater rates will be cranked up even higher.

Last week, council agreed to an immediate 10 per cent increase in the base rate component of user’s waterworks bill and a seven per cent hike in the amount consumed—or disposed of in the case of wastewater.

It will also initiate another waterworks rate and connection study to figure out what went wrong with the previous plan and how much rates must rise to avoid a collapse of the system.

Council briskly rejected a proposal to impose a levy on the general taxpayer—both customers and non-users of the waterworks system—sensing that rural homeowners, funding their own water and septic systems, would react poorly to paying for their urban neighbours’ water and wastewater.

SO WHAT WENT WRONG?
Just about every assumption driving the 2010 plan, has proved faulty. On the revenue side, there has been very little growth in new users, either residential, commercial or industrial. As a result, connection fee revenue has fallen well short of projections. Provincial grants, assumed in the original plan to average $300,000 per year, haven’t materialized either. And customers are using less water. The County has seen a steady decline in consumption. When the report was written in 2010 the average customer used 230 cubic metres of water per month. Since then, usage has fallen steadily. Next year it is expected the average customer will use just 196 cubic metres. Water conservation, while good in many respects, is clearly a problem for the County’s waterworks system.

Meanwhile, maintenance and capital costs are rising faster than the 2.1 per cent assumed in 2010.

Some around the council table offered suggestions to ease the financial impact.

Athol councillor Jamie Forrester urged the County to receive more septage (waste from rural septic systems) into the municipal systems as a means to generate additional growth.

It is an issue that has been looked at before. In each case, it was determined the challenges in balancing the system to accommodate the chemistry of the various loads would largely offset the revenue gain.

Wellington councillor Jim Dunlop pushed for a better deal with Belleville for water the County purchases on behalf of homes in Rossmore and Fenwood Gardens. These purchases total more than $400,000 each year. Currently, the County pays $3.52 per cubic metre to the City of Belleville, but charges users just $1.70 per cubic metre. Meanwhile, Belleville charges its other bulk water customers just $1.48 per cubic metre.

Sophiasburgh councillor Kevin Gale thinks it is time to re-examine the brand of waterworks system the County has built over the past decade.

“We are driving a Cadillac,” opined Gale. “We have to take a look at the efficiency and operations of this department with a fine-toothed comb. Maybe it’s time to trade the Cadillac for a Chevy. People in Picton can’t afford higher rates in Picton. And I refuse to go to Sophiasburgh asking for a two per cent levy for this system.”

North Marysburgh councillor David Harrison pushed for higher user rates, reasoning that the cost of maintaining a rural water and septic system is a much heavier burden.

“Put [the current average bill] up 50 per cent,” said Harrison. “Whatever it takes. Water has been too cheap. $1,700 is a bargain.”

Harrison may be closer to the mark. Despite a recommendation in 2010 to ratchet up the average waterworks bill by 57 per cent over eight years, very few residents attended public meetings that year. It remains to be seen whether even steeper increases will elicit a reaction from waterworks customers.