Larger volume water users will get a break under a new rate system favored by town council here.
Dan Watson of Watson and Associates Economists presented council with the results of a water and wastewater rate study update at the April 25 meeting.
Council implemented a metered water system in 2015, passing a bylaw to set the existing rates in June of that year.
“Since (then) there have been factors which have required reconsideration of the water and wastewater rates,” township CAO Brad McRoberts stated in a report.
Those factors include lower than anticipated revenue generation.
“Due to implementation of metering, consumers have been more conscious of their consumption, and in some cases, ongoing leakage issues were identified and corrected by consumers,” McRoberts explained.
Increased project costs for major water and wastewater capital projects, aging infrastructure resulting in greater operating expenses and requests from high volume commercial and industrial users for discounts are among the other factors.
The consultant’s rate update study presented council with three options, including the option of a five per cent increase (from $2.26 to $2.37 per cubic metre) to the current constant rate structure that provides a consumptive base rate that is applied to all users.
Option two involves implementing separate residential and non-residential rates. Under that system a lower non-residential consumptive rate is subsidized through a slightly higher residential consumptive rate.
The third option, selected by council, involves declining block rates. This means calculating separate consumptive base rates for different levels of consumption. As any customer consumes more water and moves to the higher consumptive block, the consumptive rate decreases.
Watson and Associates recommend creating two blocks: one for users of under 34 cubic metres and another for those using over 34 cubic metres.
A high consumption residential user on the Drayton system, using 45 cubic metres per billing cycle (bi-monthly) and currently paying about $233 would pay about $260 under either options one or three. Under scenario two, the same customer would pay $269.
A low-volume Drayton customer, using only 13 cubic metres, currently pays $105. That would move to $127 under scenario one, and just under $130 under either option two or three.
A high volume commercial user, such as a car wash, using 660 cubic metres currently pays about $2,796. Under scenario one that users bill would rise to $2,952, while under option two it would fall to $2,493 and drop to $2,548 under option three.
Councillor Michael Martins said he felt option three “would accomplish a bit of a happy medium for us.”
Martin added, “The 34 cubic metres seems to be the line that’s drawn, so once you get there, it makes sense to me – I hope that I don’t get there – but that there is a reduction in rates because there’s a line where the cost of acquiring the system, once you get on that with extra flow rates or whatever, I don’t think there’s justification for the same costs per metre … I think it would be a fair route to go.”
Watson and Associates recommend council pass rates for 2017 to be implemented immediately, and allow township staff to automatically increase rates annually on Jan. 1 starting in 2018, based on a pre-approved rate forecast.
While agreeing the township should implement option 3, councillor Lori Woodham expressed concern about the provision for automatic increases.
“I would feel more comfortable if that decision came to council … in case there is some other variable that’s happened to the system,” she said.
Monitoring costs
McRoberts noted staff would be monitoring the income and costs of the system and would provide recommendations to council in the event deviations from projections are warranted.
“I think it comes back to staff being accountable,” he said, pointing out it was staff’s monitoring of the current rate system that triggered the current update.
Council was slated to consider a bylaw implementing new rates based on option three at the May 9 meeting.
