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Recommended water rates flow upward for next five years

UPDATE May 15: “Painful, but sustainable” water rate increases will move to county council for approval later this month following discussion of the ad-hoc committee’s report at Thursday’s Committee of the Whole meeting.

“This report is the product of probably hundreds, maybe thousands of person hours,” said councillor Treat Hull. “There were three staff members, five members of the public, one an engineer specialized in water/wastewater, three councillors and the regular team meetings included three chartered accountants, three lawyers and an economist involved.

“It was an exhaustive look at a very difficult problem to which there is no easy answer. The starting point is we cannot go on with the status quo. We are currently financing water/wastewater with debt – loaning from a reserve, but it’s debt. So it’s like a household paying its montly expenses on Visa. You can only go so far.”

Councillors supported the work of the report and agreed that ultimately, the County needs more development of homes and businesses “to share the burden of our extremly costly water system” and thus approved the reduction in connection charges for developers by some $8,000 to be more aligned with neighbouring municipalities.

Hull maintained the County needs to encourage developers to avoid losing government dollars that fund growing communities, using the example of the funding of the hospital, “so important to keep the community alive.” He also stated in his opinion, that burdening rural dwellers with helping with costs “is not politically viable.”

“At the end of the day we have a solution which financially, is extremely painful, but which is sustainable, and for my money gives the best promise of encouraging the kind of development that will make this rate structure obsolete. If we get a spurt in development we can re-look at the rates to make them more moderate.”

Councillor Janice Maynard noted Thursday’s report focused on the rates and connection charges, but other issues, such as bulk water rates, and operational efficiencies are yet to be discussed in the coming months.

Recommended water rates flow upward for next five years

June 14 – Concerns about water continue to flow into Shire Hall and will surface again at Thursday’s Committee of the Whole meeting as councillors discuss recommendations to raise water and sewer rates on July 1 this year, with increases to follow on January 1 of the next four years.

A water and wastewater ad-hoc committee has made recommendations for water and wastewater rates, and for connection charges. Its mandate was to consider future rate and capital charge policies to achieve system sustainability. Members met 14 times.

Recommendations result in annual rate increases of five per cent for water and five per cent for wastewater, until 2019; four per cent in 2020 and 1.1 per cent in 2021 (calculation based on a typical customer with 124m3 of annual consumption).

Combined water and wastewater bills for a typical residential customer are forecast to increase by about $106 ($8.83/month) in 2018. The rate of annual billed increases will then decline to average $34 annually ($2.83/month) between 2026 and 2035.

Annual water and wastewater bills comprise two components – a monthly base charge imposed on meter size, and a consumptive charge per cubic metre.

The charges are used to fund the operating and capital costs (to include debt servicing) of the water and wastewater systems.

In 2010, council adopted a financial plan to move toward full cost recovery uniform water and wastewater rates over a four year period (2011-2014) but during the 2016 budget meetings learned from a Watson & Associates Economists Ltd., report that the forecasts were not being achieved. Revenue projections were not being met due to consumption not meeting forecasts and operating expenditures were exceeding forecast due to a reorganization of the department, and additional costs due to legislative requirements. Reserves were also depleted.

In the revised calculations, the Watson & Associates report states the total capital expenditures for the period 2017-2035 ($74 million), 29 per cent will be financed from reserve funds, 53 per cent through debt and 18 per cent through grants. The end of period reserve fund balances are to be $9.8 million for the water system and $0 for the wastewater system. Under these calculations, wastewater reserves funds will be exhausted due to $8.6 million (2017 dollars) in capital expenditures in 2035.

Table below prepared by Watson & Associates (click to enlarge)

 

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  1. Perry says:

    They say that one of the reasons for the increases is due to consumption not meeting forecasts. The reason for that is that people are rationing their water usage due the current high rates. I would love to able to water my lawn to keep it green during summer dry spells. However, I can’t afford to do that at the current prices, let alone what they are proposing.




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  2. Mark says:

    Well Wevil you may have a point in part of the discussion. What we do know is that a Committee of Council that met 14 times arrived at nothing more than exorbitant rate increases putting us at the highest water rates in Ontario if not all of Canada.




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  3. wevil says:

    perhaps if the county did not hire outside companies to operate our water and sewer services it would not cost so much. those companies are doing this to make a profit. the county hires outsiders to collect the money at the pay stations.is it such a large task for a county employee to empty the machines at the pay stations.seems to me this is costing us more money.




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  4. Mark says:

    If I was with the County I would be presenting a business case to the Province & Feds identifying the crippling effects of the present water & wastewater crisis upon citizens of Prince Edward. You need to be speak long and hard and pressure other levels of government to be a partner in finding financial solutions. Simply applying 5% annual increases is not due diligence or representing the population well.




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  5. Jim says:

    If the Mayor and Council are not kicking the door in Ottawa for emergency debt relief, for this made in the county disaster, they should(and will)be shown the door themselves in the next election.




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  6. Susan says:

    Article in Welllington Times indicates we have the highest water rates in Ontario. Perhaps in all of North America.




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  7. Fred says:

    A tip of the hat to the Ad Hoc Water Committee’s hard work in bringing in annual 5% rate increases to a system already charging far beyond other municipalities? Bravo indeed!!! Lol




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  8. Gary says:

    Unreasonable, outrageous come to mind… Since they are fond of “States of Emergencies ” well I suggest this water fee debacle is one.




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  9. Mark says:

    Have the bulk water rates increased? I would hope significantly to offset the urban crisis.




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  10. Emily says:

    Something is very,very wrong here in Prince Edward when our water & wastewater fees are among the highest in the Country. No solutions other than raise user fees. This will not encourage more connections to the system to assist with costs. Many will run from such mismanagement.




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  11. Susan says:

    This is a real kick in the teeth for urban dwellers. 5% on both water and wastewater every year of the next three. How can Council expect this to be acceptable or sustainable by many. A lot of folks are in arrears and can’t pay the current charges which are extreme. Can you imagine water fees equalling or greater than property taxes? This will discourage urban development and one more reason for young families to move from the County.




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  12. Fred says:

    I know that our water & wastewater rates were extremely high in comparison to most municipalities prior to this proposed yearly increase schedule. Do we now have the proud distinction of having the highest rates in all of Canada? I don’t know how Council can accept these recommendations and lay this on the residents. There is no end to the fees. How will the working poor be able to manage?




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