Money needed for wa­ter

CBRM ap­ply­ing to the Util­ity and Re­view Board for rate in­crease

Cape Breton Post - - CAPE BRETON - BY NANCY KING nk­ing@cb­post.com

The Cape Breton Re­gional Mu­nic­i­pal­ity is ap­ply­ing for wa­ter rate in­creases be­cause the cur­rent rate struc­ture isn’t rais­ing enough rev­enue to cover the cost of op­er­at­ing the util­ity.

Over­all, the CBRM is look­ing for a res­i­den­tial in­crease of 21.1 per cent over three years to en­sure the util­ity doesn’t con­tinue to ex­pe­ri­ence an op­er­at­ing deficit.

Con­sul­tants Gerry Isenor and Blaine Rooney ap­peared at Tues­day’s reg­u­lar monthly coun­cil meet­ing to present the find­ings of their wa­ter rate study.

Isenor told coun­cil that at the end of last year, the util­ity’s ac­cu­mu­lated deficit stood at $4.9 mil­lion and it is ex­pected to grow to about $6.8 mil­lion this year.

The last rate in­crease in the CBRM was struck in 2013.

“It’s over four years now since you’ve had an ad­just­ment and that al­ways catches up, when we have that kind of a de­lay,”

Isenor said.

Coun­cil­lors voted in favour of mak­ing the ap­pli­ca­tion to the Nova Sco­tia Util­ity and Re­view Board.

Un­der the ap­pli­ca­tion, in the first year, the quar­terly wa­ter bill for the av­er­age res­i­den­tial cus­tomers would go from $102.81 to $118.03, an in­crease of 14.8 per cent. That in­crease

would be fol­lowed in sub­se­quent years by an ad­di­tional three per cent to $121.61 and then by 3.3 per cent to $125.58.

They noted that the CBRM is gen­er­ally about mid-range among Nova Sco­tia mu­nic­i­pal­i­ties in terms of wa­ter rates charged to res­i­dents.

Isenor said they have built into the sec­ond two years of the rate struc­ture some ini­tial re­pay­ment of about $1 mil­lion of the util­ity’s deficit.

“(But) noth­ing in the first year be­cause to get the rates ad­justed to cover the cur­rent op­er­at­ing short­fall, it would be un­wise to add more ex­pense in that year,” he said.

About 42 per cent of the CBRM util­ity’s rev­enue comes from base charges, with the rest from sell­ing wa­ter, which Isenor called a good split for a mu­nic­i­pal­ity of its size.

The util­ity is los­ing about 250 cus­tomers a year and that has been built into the new rate struc­ture. The cus­tomers that re­main are us­ing less wa­ter as the ef­fects of con­ser­va­tion ef­forts such as more ef­fi­cient toi­lets and show­ers are felt, and the num­ber of peo­ple liv­ing in house­holds is also de­creas­ing.

Isenor said util­ity staff in­di­cated they ex­pect to see about $18 mil­lion in cap­i­tal spend­ing by the wa­ter util­ity in the next three years, paid for out of the cur­rent de­pre­ci­a­tion rates and with­out tak­ing on ad­di­tional loans.

CAPE BRETON POST PHOTO

The Cape Breton Re­gional Mu­nic­i­pal­ity is ap­ply­ing for wa­ter rate in­creases.

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