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Town unveils long-term water, sewer plans

by Kris Svela

MINTO - Council here is considering a plan that would plot water and sewer rates to 2020.

Its water and wastewater financial plan was unveiled at  the Jan. 10 meeting by Andrew Grunda and Dan Wilson of Watson and Associates Economists Limited.

The company was first hired by Minto in 2005 for a plan to cover water and sewer costs  based  on a user analysis and operating and capital forecasts.  The company  delivered an update of that plan which, if approved, would set rates to 2020.

Some 200 commercial properties are metered currently, while homes pay  a flat fee for water. Non-metered consumption is estimated at  270 cubic meters annually.

In the study, the company’s user forecast for 2011 is 2,287 residential and 260 non-residential water users or $1.01 per square metre used. Sewage usage is set at 2,183  residential and 249 non-residential or $1.11 per square metre used. 

The company estimated that by 2020 water use will involve 2,539  residential and 287 non-residential units, and sewer use will involve 2,435 residential and 270 non-residential users. 

Last year, users paid a flat fee of $42.50 for water and $46.50 for sewers.

The plan also calls for full metering of homes that could be in place by 2017. Council has applied for provincial funding to pay for  meters. The flat rate will stop once full metering is in place and residents go to a full user-pay system.

Grunda told council the plan takes into consideration current reserves that would be used for upgrades to the system and how much would be raised through billing. He said bills will continue to fluctuate for metered and flat users until metering is in place.

“By the time we get to 2016 everybody is paying the same rate,” Grunda said. “TG Minto, the hospital and nursing homes  - everybody is treated  the same from a rate perspective.”

It’s expected water rates by 2020 would be about $1.89, while sewers would cost $2.23 per square metre used.

Meters will also give the town a better indication if the 270 cubic meter usage level is close.

Treasurer Gordon Duff said the financial plan and rates spell out what is needed for council to proceed.

“The Town of Minto received its external accreditation from the  Canadian General Standards Board (CGSB), the Ontario Drinking Water Quality Management Standard effective Nov. 10. 2011,” Duff stated  in a report to council.

Under the legislation council must approve a financial plan by Jan. 29. At the same  time, changing capital expenditure forecasts made it desirable to  review projected water and wastewater rates.

Duff said Watson and Associates Economists Ltd. was retained to assist with the preparation of the financial plans as its staff is familiar with the operations of Minto’s water and wastewater systems.

“At the end of 2020, water and wastewater reserves will total just  over $4 million with net new water debt of $2.1 million and new sewer debt of about $300,000,” Duff said.

“At the end of 2011,  water and wastewater reserves totaled approximately $1.9 million. Outstanding water debt is now about $1.5 million and outstanding wastewater debt is $3.5 million.”

If the recommendations are followed, the total water debt in 2020 will be about $2.25 million while the outstanding wastewater debt balance will be about $1.4 million.

Reserves will be lower than they would be if rates were increased at a faster speed, he said.

“In summary, water and wastewater rates are forecast to continue to  increase from 2013 to 2018, but the amounts of the increases are lower than if the same rates as contained under the current bylaw were projected into the future,” Duff added.

“A conversion to the use of water meters is anticipated as the province is strongly  encouraging this objective. The cost of converting from the simpler flat system is high (estimated at approximately $1 million), but a metered system will be more fair and should encourage conservation of scarce water resources. In the proposed rate structure, the cost of these meters would be covered by the rates as a whole without the need for special surcharges.”

The treasurer expects customers will pay about $275 less annually in  2016 whether paying flat or metered rates compared to a typical flat fee customer in 2014.

Council is expected to make a decision at its meeting later this  month.

January 20, 2012

 
 

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