Opinions vary on sewer, water rates

Town council tabled the proposed sewer and water rates Monday night after it became clear several councillors, and local businesses, felt the hikes to the commercial sector were too drastic.
“What concerns me most is no one can live in Fort Frances if they don’t have jobs. And if the businesses can’t function. . . .” said Coun. Tannis Drysdale, referring to the fact some businesses may be hit so hard by the proposed rate increases they would have to shut down.
“It’s easy to say, ‘Just put it on your costs,’ but we all know there’s a limit to that,” she added. “And if we’re the only community that’s doing this, in advance of Mr. McGuinty’s regulation, then we’re going to price ourselves out of business.
“You can say it is subsidization, but then you can look at tax rates and recognize some businesses pay four times that of residential customers in taxes.
“We haven’t been able to level that out,” she noted.
“My big concern, watching the forest industry, watching Atikokan brought to its knees, is what are we doing to keep people in Fort Frances?”
Coun. Drysdale said when you look at the report from CN Watson and Associates, it assumes 10 years from now, Fort Frances will have the same number of households.
“I don’t see that trend,” she noted. “I think that’s the big picture. I think that’s the long-term plan.”
Coun. Todd Hamilton said he’s been mulling over the sewer and water rate increases and decided they need more work. “It’s too much, too soon,” he remarked.
He added the town doesn’t know when the provincial legislation will kick in, and perhaps the town should wait until then and spread the increases over 20 years instead of 10.
“I concur with Coun. Hamilton. We should take it back and look at it,” said Coun. Neil Kabel.
Council also heard presentations Monday night by Christine Denby, first vice-president of the Fort Frances Chamber of Commerce, and Paul Noonan, co-owner of La Place Rendez-Vous, indicating they also wanted to see the proposed rates reconsidered.
“After reviewing the report [from CN Watson & Associates], it was clear that total support of area businesses by town council was not there,” said Denby, reading a letter from Chamber president Gary Rogozinski.
“It appears the burden of meeting the future financial obligation is placed squarely on the shoulders of the area business customers, with very little on the residential customers,” she added.
“If this is what we call supporting the business community, then we need to revisit our strategy,” she stressed. “The continual increase of restrictions and financial burden to businesses will only result in more empty buildings in downtown Fort Frances.”
Denby said the Chamber is willing to sit down with the town, and strongly encouraged the town to distribute increases “in a fair and equitable manner to all customers.”
Noonan said that after figuring out how much his rates would go up in the next six months, it left him in “shock.”
“For a business like the Rendez-Vous, that’s a $10,000 increase in the first year alone,” he remarked, adding the proposed increases to residents is a fraction of the hike facing the commercial sector.
As of July 1, the metered commercial rate for water was slated to go up from $0.69/cubic metre to $0.89 while the metered rate for sewer was slated to change from $0.61/cubic metre to $0.75.
And in January, 2006, that metered commercial water and sewer rates were to rise to $1.10/cubic metre and $0.89/cubic metre, respectively.
“How can you justify this increase to just one segment of the population and not the other?” asked Noonan.
On top of that, he added, there’s been an inequity between commercial and residential tax rates for years.
“I’m sorry, mayor and council, but your current rate proposal is flawed and needs to be taken back to the drawing board,” he said.
Noonan warned if the town passes the new rate structure, larger users might opt to go “off the grid” and leave residents “holding the glass.”
But Mayor Dan Onichuk said the commercial sector has gotten a break for too long, and that the revised fee schedule was an attempt to fix that by making the cost per cubic meter of water the same for both residential and commercial in the next five years.
“I understand your concern, but do you realize that residential rates now subsidize commercial rates to the tune of $642,000 a year?” asked Mayor Onichuk.
He noted that out of 250 local businesses, more tan 160 are being subsidized by residential customers and the 80 smaller businesses in town that pay a minimum charge for their metered rate.
“The residents have been subsidizing commercial for a long, long time,” the mayor remarked.
He added businesses claiming their taxes are too high should recall that the town has been working to equalize commercial and residential tax rates.
As well, residential property owners have seen about a 17 percent increase in taxes over the past two years while commercial property owners have seen a hike of less than five percent.
“We have to deal with this,” Mayor Onichuk stressed, referring to the fact the town must set rates and start building its reserves for water and sewer projects as soon as possible.
“We can’t be blind-sided by the province.”
He added the report from CN Watson and Associates, and its recommended fee schedule, was not developed overnight, saying the town has been working on it for more than a year.
CAO Mark McCaig noted the town is not in a “panic scenario,” and, in fact, took care to spread out the rate increases, which were calculated as necessary to generate revenue and build reserves to take care of projected sewer and water costs for the next 10 years.
He admitted no one knows exactly when new government regulations could kick in, but if the town does not start increasing its sewer and water rates soon, it could find itself in a position where repairs will need to be done and the hikes will be “more severe.”
By implementing the fee schedule now, it helps “mitigate rate shock,” said McCaig.
Doug Brown, the town’s manager of Operations and Facilities, noted council can set the fee structure however it wants it.
“But I can tell you right now, it’s costing us $2.26 per cubic metre [to treat water] and commercial is only paying $1.64,” he remarked.
Council unanimously agreed to hold a special meeting next Tuesday (July 5) to further discuss the proposed sewer and water rates in hopes of having a decision at its regular meeting July 11.
According to the fee schedule recommended in the report from CN Watson and Associates, the hike for this year would have seen the residential water rate jump from $28.92/month to $30.37 and the sewer rate go from $25.52/month to $25.54.
The flat commercial water rate would go from $38.12 to $49.17 per month while the flat commercial sewer rate would rise from $33.64 to $41.36.
The metered commercial rate for water would go up from $0.69/cubic metre to $0.89 while the metered rate for sewer would change from $0.61/cubic metre to $0.75.
This would be followed by a second increase in January, 2006, where water and sewer rates for residents would jump to $30.74 and $25.60, respectively, while flat commercial rates would increase to $60.77 and $49.08, respectively.
Metered commercial water and sewer rates would rise to $1.10/cubic metre and $0.89/cubic metre, respectively.