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New water and sewer rates coming down the pipe

Residential property owners could see savings, but ICI/multi-residential customers forecasting big increases in costs.
2015 11 23 Karpenko, margaret city hall lb
The city's chief financial officer, Margaret Karpenko, presents the proposed rates to members of council during committee discussions in Council Chambers on Monday night. PHOTO BY LIAM BERTI

As the members of City Council inch closer to the bulk of budget deliberations, one of the hottest issues of the year is one step away from being approved.

After the water and sanitary sewer operating budget was discussed in recent weeks, the politicians received a report from the city’s chief financial officer, Margaret Karpenko, on Monday night outlining the water rates that will recover the city’s 2016 costs.  

The budget coming forward will propose a 1.84 per cent increase, down from the original 3.32 per cent that city staff tentatively tabled. 

The total budget, as it stands, allocates $11.9 million for the water system and $8.8 million for the wastewater system. 

As Coun. Derek Shogren identified, if that proposed water and sanitary sewer operating budget gets the final approval, it could be the lowest increase in recent history. In fact, the city’s long-term sustainability plan called for a minimum of five per cent annual increase in the budget, Karpenko said on Monday. 

The customer rates, which fund the entire water and sanitary sewer operating, capital and financing costs, ignore property classes and charge customers based on their water meter size and consumption volume, reflecting a 60 per cent fixed, 40 per cent variable cost recovery model. 

Come 2016, every water customer will pay the same rate for a cubic meter of water consumed. 

As Mayor Al McDonald was quick to call attention to, the politicians’ efforts to shift some of the water burden from the residential customer to the ICI/multi-residential owners will reduce the volumetric costs by 43-cents per cubic meter. The water filtration plant fee, which is currently charged on standard a connection fee, will be based on water meter sizes as well. 

As a result, a home with the typical residential meter size can expect to pay $29.50 in fixed costs, $1.03 per cubic meter of water consumed, plus the wastewater surcharge and water filtration plant debt payment of $33.49 and $2.85, respectively.

In total, if the customer uses 14 cubic metres of water, their bill assumption would come to $80.26, down from $90.36 under the exact same consumption pattern right now. 

However, while the new rates are being broadcast as potential savings for residential customers, most of the ICI/multi-residential property owners are bracing themselves for the transition. 

To illustrate the impact for those property types, Mark King said the water costs throughout the city system are set to increase drastically. 

Most notably, King identified Pete Palangio Arena’s water costs jumping 326%, West Ferris Arena 247%, the Fire Department 147%, Memorial Gardens 81%, and City Hall 44%, to name just a few.

“We charge ourselves just like we charge our citizens,” Karpenko explained. “Some of those facilities have user pay systems and as user fees are amended, the recovery portion will either have to be retained through the tax levy, user fees, or other means.

“In order for the water and sanitary budget to balance, we have to treat ourselves equally and charge the city,” she added. “If the city doesn’t pay the same rate as a regular user, the burden will be shifted on the rest of the users.”

On the private side, council also heard from a range of property owners in the community on Monday night. 

One presentation came from the owner of a condominium complex whose water costs are anticipated to increase to $1,368 from the current $667 per month (based on September 2015) under the fixture-size model. 

The over-emphasis on the fixed cost side of the equation, he argued, is going to force some property owners to reevaluate everything. 

According to the proposed budget, the fixed costs would start at $29.50 for pipes in the 5/8-inch to 3/4-inch range, while the bigger pipe sizes can expect to pay $76 for a one-inch pipe, $153.41 for a 1.5-inch pipe, $245 for a two-inch pipe, all the way up to $1,528 for a six-inch pipe, the largest listed. 

“Is there any other utility that increases its rates by 51 per cent?” asked the presenter. “Simply put, we cannot afford these astronomical rates, and some people will have to find other accommodation because of it.” 

Approximately $7 million of the tabled budget is allocated for capital projects, which the councillors were given a basic report on during Monday night's meeting. A specific list of those projects and the in-depth discussion will take place to review the city’s proposal on Tuesday, December 8.

Council was also pitched the idea of residents being able to run their water this winter to prevent pipe freezing, while charging them the average price of their bill over the three summer months in which their consumption is at its highest. 

In doing so, resident Miles Peters argued homeowners would be put at ease about their pipes freezing up and having to scramble to cover the costs after years of being instructed by city staff to run their water. 

Council will cast their final vote on the water rates next Monday before the bylaw is presented for three readings prior to the December 31 deadline.  

Check BayToday soon for more on the city’s capital forecasts for 2016.



Liam Berti

About the Author: Liam Berti

Liam Berti is a University of Ottawa journalism graduate who has since worked for BayToday as the City Council and North Bay Battalion reporter.
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