Moment with the Mayor: New Water Rates

Hi Neighbours:

“Sticker shock” is the best way to describe my first reaction to the suggested water rate increase. But there are certainly factors that make the increase necessary:

1.       The debt servicing charge on the Water Tower and EK Water line, which benefited from a low interest program set up by the provincial government, is about $1,152,355.35 including interest per year.

2.       Rates have not been adjusted since 2011.

Paying for the water tower and water line is not cheap. If the Town were to charge equally for every water meter in use, it would mean that each would be charged $155 four times a year (3 month billing cycle) or $620 per year to pay this year’s $783,000 principle debt payment (total $1,152,355.35, including interest) on the water infrastructure. Or, should there be a separate rate for residents and business, such as $135 for residents and $185 for businesses? None of these figures even include the consumption charge, which is additional.

Another factor to consider is the reserve level for utilities. Because rates have not been raised since 2011 and costs have increased, the reserves have been depleted much faster than is prudent. Approximately $1 million needs to be paid back into reserves. The question Council had for Administration is how quickly does the reserve have to be paid back? What is the risk if we pay it over 3 years rather than 2 years?

Administration has been developing some options for Council, and in broad terms, they are as follows:

Option 1: The original presentation by Administration during the last meeting based on tiered rates

Option 2: Slightly lower consumption rates, tiered, so that the reserves are replenished at a less aggressive or slower rate

Option 3: A 50% debt repayment fee for every water meter, plus a lower tiered consumption rate

Option 4: A 100% debt repayment fee for every water meter, plus a lower tiered consumption rate

There are many things Council has to consider with regard to the utility rates:

•    What is a fair method to charge?

•    Should low users pay the same as high users given that the more water used does not make it cheaper to produce? (Should low users subsidize high users?)

•    What share should residents pay?

•    What rate reflects a charge level that encourages business growth and water conservation?

Please write or phone if you would like me to discuss a particular topic. If you have any questions or comments, drop me a line at the town office or email me at mayorenns-wind@kindersley.ca. You can also check out my blog at http://mayorjohn.blogspot.ca/. I appreciate your feedback.