ICI water, sewer rates set to jump

Duane Hicks

With an eye towards the implementation of meters for all water customers in coming years, town council will see industrial, commercial, and institutional (ICI) customers starting to pay more for water and sewer in 2009.
While the rates have not yet been passed as a bylaw, town council approved a report last Thursday that will see the minimum water and sewer rate for ICI remain the same at $1,014.96 per year, or $84.85 per month ($44.94 for water and $39.64 for sanitary sewer).
But the threshold at which ICI customers have to start paying more for water used has been lowered. The number of cubic metres included in the minimum monthly bill for ICI customers has been reduced to 20 cubic metres a month, or 240 cubic metres a year.
This is way down from last year, when 657.60 cubic metres were included per year in the minimum bill for ICI customers.
As well, the volumetric ICI metered rate (the rate paid for water used above the 20 cubic metres a month) will be set at $1.71 ($0.92 for water and $0.79 for sanitary sewer) per cubic metre.
This is an 11.76 percent increase over the 2008 rate of $1.53 per cubic metre.
Operations and Facilities manager Doug Brown said the Operations and Facilities executive committee, which consists of Mayor Roy Avis and Couns. Ken Perry and Rick Wiedenhoeft, had several objectives when developing the 2009 rates.
These included obtaining an additional $179,750.04 in revenue compared to the 2008 budgeted forecasted revenue, starting the process of addressing the inherent inequities within the classes, whereby ICI customers would start paying a rate closer to the actual costs of manufacturing water and treating wastewater, and adjusting ICI rates in order to reduce the residential and non-residential subsidization of those rates that has been going on for years.
For example, ICI used 33 percent of all treated water here in 2008 but only paid for 21 percent of it—leaving residential and non-residential customers to make up the 12 percent difference.
In another example, Mayor Avis pointed out residential rates currently see customers pay $3.18 per cubic metre for water and sewer while the commercial side pays $1.71. The town’s actual cost to produce water is $2.83 per cubic metre.
The reason for the inequity in the first place stems from past years, when the amount the commercial sector paid in taxes was far greater than residential—the lower water and sewer rates were a way to give businesses a break.
However, in more recent years, that gap has decreased.
Brown said the adjustment to ICI this year also is to help prepare for the implementation of residential water meters and a fully-metered system, which is expected to take place in the next few years.
Since a fully-metered system will mean significantly increasing ICI rates to be in line with residential metered rates, the adjustments have to start now to avoid “a huge rate shock all at once.”
“I think we’re moving towards a metered system in the future, I think it’s closer than five years,” Brown said.
“We’ll probably be up and running in five years; we’ll need one year for data collection just to see how to set the rates in that transition year,” he noted, adding the town is waiting for electrical “smart meters” to be implemented so it can “piggyback” on the communications system those will use.
“I am really pleased to see that we’re moving towards the metered system. I think it’s the way to go,” said Coun. Andrew Hallikas.
“I believe it is not ‘if’ water meters are coming, it is ‘when’ water meters are coming,” noted Coun. Rick Wiedenhoeft. “You can bet it’s probably going to be government-ordered and government-regulated, and if we don’t do something, as Doug has already indicated, right now to start easing the pain of going into a water meter system for our residential as well as our commercial, it’s going to be a huge, huge shock when water meters come in.
“We’ve got to be more proactive in factoring in that pain over a longer period of time rather than hitting ICI all at once with a huge rate increase that they wouldn’t be able to tolerate,” he stressed.
“I feel that we should prepare ourselves and the only way to prepare ourselves is doing what we’re doing today,” echoed Coun. John Albanese.
Coun. Paul Ryan agreed, adding he also was glad to see the town addressing the inequity between rates for the various classes.
“The residents of this town has been subsidizing ICI for many years,” he noted.
“We have to promote more conservation,” stressed Mayor Avis. “You have to look at the conservation side of it than the rate increase side of it. If you do reduce and conserve, then your rate is not going to be as high.”
In related news, the residential water and sewer rate will remain the same as in 2008 at $770.04 per year, or $64.17 per month ($34.09 for water and $30.08 for sewer).
The volumetric metered rate per cubic metre for Couchiching First Nation and other non-residential customers will be set at $3.99 per cubic metre, which breaks down to $2.12 per cubic metre for water and $1.87 per cubic metre for sanitary sewer.
The 2008 rate was $3.50 per cubic metre ($1.86 for water and $1.64 for sewer).
And the water rates for private fire hydrants will go up from $40 to $42 per month while private sprinklers will jump from $12.54 to $13.17 per month. This represents a five percent increase over 2008 rates for both.
The 2009 water and sewer rates will be voted on as a bylaw at a future council meeting.