Duane Hicks
Fort Frances ratepayers likely will be paying more on their sewer and water bills in 2010, with residents to see a two percent increase and the industrial, commercial, and institutional (ICI) sector a 17 percent hike.
During a committee of the whole budget meeting yesterday, Operations and Facilities manager Doug Brown explained the increase to ICI is a continuation of a five-year plan to addressing the inherent inequities within the rate classes.
“In 2009, the ICI sector paid a variable rate of $1.71 [per cubic metre] total for sewer and water. Now we are suggesting $2,” Brown noted.
“We know our average cost is [$3.15], so we’re still subsidizing them. Non-residential and residential are subsidizing ICI,” he stressed.
That subsidization sees residents paying an average of $3.52 per cubic metre.
The volumetric ICI metered rate (the rate paid for water used above the 20 cubic metres a month) will be set at $2 ($1.08 for water and $0.82 for sanitary sewer) per cubic metre.
The adjusting of the ICI rates is in order to reduce the residential and non-residential subsidization of those rates that has been going on for years.
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.
The adjustment to ICI 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 couple of years.
Since a fully-metered system will mean the upward adjustment of ICI rates to be in line with residential metered ones, the adjustments have to start now to avoid “rate shock” down the road.
Last year, ICI went up 11.76 percent.
After remaining status quo last year, the residential water and sewer rates are expected to jump two percent this year. The monthly rate for water will go up from $34.09 to $34.77 while the monthly rate sewer will increase from $30.08 per month to $30.68.
This will mean an increase from $64.17 per month for water and sewer on residents’ bimonthly bills to $65.45 per month—a $1.28 increase per month.
Since bills are bimonthly, that means the total increase per bill will be $2.56.
Over one year (six bills), that means a total rise of $15.36.
If passed by council at its regular meeting this coming Monday, the increase to residential rates will help support a portion of the $1.8 million in water- and sewer-related capital projects the town plans to do this year.
Without the residential increase, the town would have to draw $220,000 out of its water and sewer reserves to help pay for that.
With the increase, it only will have to take $27,000 out of reserves.
Brown stressed the need for the town to do all of these water- and sewer-related capital projects is significant, noting there is more than 13 km of water and sewer pipes in Fort Frances that are over 80 years old and have reached the end of their life cycle, and these will need replacing over the next 10 years.
Meanwhile, the volumetric metered rate per cubic metre for non-residential customers will be set at $4.40 per cubic metre, up from $3.99 last year.
The next water and sewer bill reflecting the new rates will be issued March 1.
