Township water system users are facing a rate increase, with Moorefield residents paying slightly more than those in Drayton, if the township accepts recommendations in a recently completed water and wastewater study.
With council set to consider a new fees and charges bylaw at its June 23 meeting, Dan Watson of Watson and Associates Economists Ltd. outlined options from the study at the June 9 meeting.
The township operates two separate water systems and wastewater systems in Drayton and Moorefield. All customers in both communities are currently charged monthly flat rates for both water and wastewater. Certain customer categories, such as large commercial, municipal or institutional system users, are charged using a rate multiplier based on estimated water use.
The township has installed water meters for the approximately 800 users in Drayton and 190 users in Moorefield and is in the process of switching billing to a charge that will include a monthly base charge and a consumptive charge.
“We’re recommending a very traditional rate structure where you have a base charge based on the meter size,” plus a charge per cubic metre of water usage, Watson explained.
Based on the relative size of the systems, the study recommends a charge of $2.50 per cubic metre would be required to recover costs for Moorefield and a charge of $1.54 for Drayton. “Because of economies of scale you can have a lower rate in Drayton, but it results in a higher rate in Moorefield,” he noted.
However, the consultants are recommending combining the usage rates and charging system users in both communities $1.73 per cubic metre, while charging Moorefield residents a slightly higher monthly base rate, $15, as opposed to $13 for Drayton residents.
Piggybacking encouraged
“You’re still recognizing there is a difference between the two systems and we kept the base charge different to address it,” said Watson, adding other areas municipalities, including Centre Wellington, Minto and Woolwich, follow a similar practice.
“When you have a financially unfeasible system … piggybacking is something the province actually encourages,” Watson pointed out.
“Yes, Drayton would be subsidizing Moorefield customers, but it’s a best practice to make the Moorefield system more financially feasible.”
Councillor Dennis Craven asked if Watson could foresee a day the Moorefield system wouldn’t require subsidization.
“You would really have to reach the point where you had the same number of users,” Watson replied.
Projected water rates include 10-year capital spending forecasts of $3.71 million in Drayton and $365,000 in Moorefield for water.
For wastewater services, the capital plan totals $5.51 million in Drayton and $1.03 million in Moorefield. The forecast includes some major projects, such as a new standpipe/water tower in Drayton and wastewater capacity increases in both communities.
“You’ve had rates stay the same over many, many years … that’s part of the reason rates are going up now,” said Watson.
“Compared to running your own system, it can be pretty cheap,” stated Mayor Neil Driscoll.
