St. Marys water rates likely to be set for five...
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Jul 08, 2014  |  Vote 0    0

St. Marys water rates likely to be set for five years

St. Marys Journal Argus

Stew Slater

St. Marys Journal Argus

Users of water and wastewater services in the Town of St. Marys will not see their rates increase, in a back-dated fashion or otherwise, for the year 2014. But over the years 2015-19, it’s quite possible they will see those rates increase — in a manner that’s much more predictable than what has been the case in the past.

At a Committee of the Whole meeting of Town Council on Tuesday, July 8, councillors were presented with a recommendation from staff to “approve the five-year proposed rate changes effective Jan 1, 2015 and for the following four years.”

In the past, water and wastewater rates have been set by Council in conjunction with the passage of the annual budget. This year, however, administrative staff asked councillors to hold off on approving rate changes until the completion of a “Master Servicing Study” as well as engineering reports into two proposed infrastructure upgrades: the wastewater treatment plant and a second water tower.

With significant work now having been completed on those studies, a proposed five-year plan for water and wastewater rates was brought forward. If the approach is approved by the regular sitting of Council a its July 22 meeting, there will be no rate increase for 2014.

The proposed five-year plan would see water rates increase by an average of about three per cent in each of the five years, while wastewater rates would increase by an average of five per cent. Overall, that would translate into an average increase to users of approximately 3.9 per cent over each of the five years.

Director of Finance David Janseunne said the main factor in determining the proposed increases was a consideration of the costs of predicted but not-yet-approved upgrades in water and wastewater infrastructure — including a second water tower on the water side of the equation, and an expansion of the wastewater treatment plant on the wastewater side. In the town's projections, those projects come in at just under $3 million and just over $10 million, respectively.

CAO Kevin McLlwain suggested the alternative to implementing water and wastewater rate changes year after year is to hold steady until the money is needed for infrastructure upgrades. "You could be looking at increases of 15 or 20 per cent in a single year if we took that approach."

McLlwain noted Council has the option of approving the five-year plan, and then not having to give staff the go-ahead each year to implement increases. “But, if something changes, they can always go back and repeal the five-year plan,” the CAO said.

It was this new approach, however, that concerned Councillor Don Van Galen.

"I have a little bit of a democratic conundrum," he said at Tuesday's Committee of the Whole meeting, adding he's worried "that this Council would set the rates for the next five years, for the next Council."

Councillor Lynn Hainer, however, countered that Town Council already sets financial commitments for those who follow, and gave debenture payments as an example. And Councillor Carey Pope recalled discussing water and wastewater rates during past years' budget deliberations, "when we had a lot of other important issues that also needed to be addressed."

“It’s more or less a courtesy to our users,” McLlwain said in an interview, regarding the new approach. “It’s nice to know what your rates are going to be, going forward, so you can plan more effectively for the future.”

Implementing the annual increases on Jan. 1 instead of part-way through the year will also make the process more predictable.

A 5-1 vote at the Committee of the Whole meeting means the proposal will be brought to the July 22 regular Council session. Van Galen was the only one to vote against the motion, while Councillor Stephen McCotter was not in attendance.

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