Judging by the poor attendance at last week’s special council meeting, residents either don’t care or don’t realize their water rates could increase by an average of 11.4% every year for the next decade.
Only three people attended the meeting on Feb. 22, which saw Gary Scanlon, of Watson and Associates Economists Ltd., present a recently completed water rate study to Erin council.
In 2010, an Erin customer who used 190 cubic metres of water for the year would pay an annual base rate of $108 plus a consumption rate of $374, for a total annual bill of $482.
Using the recommended rates provided by Watson and Associates, that figure could rise by 165% to $1,276 in 2019. The annual projected increases for a consumer using 190 cubic metres of water are:
– a 12% overall increase this year to $540 (an annual base rate of $121 and a consumption rate of $419 [190 cubic metres times $2.21]);
– 11% increases annually from 2012 to 2018 inclusive, with total annual bills of $600, $666, $739, $821, $911, $1,011 and $1,122; and
– a 13.7% increase in 2019 to $1,276 (annual base rate of $287 and a consumption rate of $989).
The owner of a local car wash took exception to the proposed rates, saying it could cost him business, as he would have to raise prices and consumers may go elsewhere.
Scanlon explained the recommended rates are based on “100% sustainability” by the end of the ten year period, meaning there should be enough recovered from the rates to help cover operating and capital costs for the period.
Watson and Associates offered two other rate scenarios, the first of which is also based on 100% sustainability and would see a 20% increase this year, followed by average annual increases of 10.4% until 2019.
The third choice is a 50% sustainability model, with average annual increases of 7.6% for the next ten years.
But as one resident in the gallery pointed out, that option could mean the municipality would have to seek a loan to fix problems, so it may be better to go with higher water rates to cover costs and ensure the town has adequate reserves.
Councillor Barb Tocher hopes higher water rates could also result in better conservation.
Scanlon concluded by saying anything council decides now does not lock in the municipality over the next 10 years.
“As the [provincial] legislation considers this report a ‘living document,’ it will provide a basis for annual review during the town’s capital and operating budget process,” Scanlon said.
Lifecycle items are a long-term issue, he added, but the town must adopt a report to meet the legislative requirements for approval of its licence to operate a water system.
Erin council will make a formal decision on 2011 water rates at its next meeting on March 8.
