Money needed for water
CBRM applying to the Utility and Review Board for rate increase
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.