Water rates climbing to meet capital needs
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Dec 10, 2014  |  Vote 0    0

Water rates climbing to meet capital needs

Stratford Gazette

Jeff Heuchert editor@stratfordgazette.com

Stratford’s combined water rate will climb five per cent next year and will likely continue going up until 2024 as the city responds to increased operating costs and future capital infrastructure replacement.

Councillors on Monday approved a new rate structure and a 10-year financial plan as presented by Gary Scandlan, associate director at Watson and Associates Economists Ltd., a Mississauga company that was retained by the city to carry out a review to identify current and future water and wastewater system capital needs and cost recovery options.

Beginning in 2015, the average residential customer, calculated based on a consumption of 200 cubic metres per year, will see a jump on the water portion of their bill to $220.44 from $208.44, a 5.76 per cent increase. That comes from a new monthly base charge of $1 on metres for all water users that is projected to continue into year five of the plan. Beyond that any increases would be tied to inflation.

A fixed $1 monthly charge will also be applied to the sanitary sewer rates for 2015, but the plan as proposed would increase that rate by an additional $1 per month in each subsequent year. Under that scenario, users would be paying a fixed charge of $120 by 2024. Additionally, the volume charges for sanitary will increase one per cent annually.

These changes will result in the average residential customer’s wastewater bill jumping to $340.42 from $325.17, a 4.69 per cent increase.

According to Scandlan, the new fee structure - with more fixed charges - will provide the city with greater certainty in terms of revenue. He noted that a wet year where fewer people are watering their lawns, for instance, can have an impact on the bottom line for the city.

“We’re looking at a little more revenue stability,” he added.

The city is facing 10-year capital needs exceeding $48 million for its water and wastewater systems.

Additionally, there is a $4.9 million deficit in the city’s sanitary reserve fund that needs addressing. In addition to paying for current operating costs, money collected in the new rates would also contribute to a reserve for future requirements, including water tower recoating and water main replacements, and upgrades to the water pollution control plant and pumping stations.

The rates that are needed to help fund these improvements remain “very comparable” and “very reasonable” when compared to those of neighbouring municipalities, said Scandlan.

A chart in his presentation to council shows that Stratford, with a combined average residential water and wastewater bill of $560.86, is still well below communities including London, Kitchener, and Goderich.

At the top of the list is Sarnia, which by comparison charges more than double that of Stratford at $1,296.

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