The Glengarry News
15% water rate hike ‘a big pill to swallow’
South Glengarry water and sewage rates will rise by 15 per cent as the township hikes service fees for the first time in six years.
The increase is expected to be passed at the next regular council meeting June 27. Another increase will probably be imposed next year.
“Everybody recognizes that we’ve been stalled since 2010, with no rate increases,” Mayor Ian McLeod said last Wednesday night during a special council meeting to discuss the 2016 water and wastewater budget.
“Well, everything (capital and operating costs) has gone up two to three per cent since then, so we’re probably 15 per cent behind where we were then, plus all that we lost in those five or six years. So we do have to catch up.”
The new rates will affect residents using municipal systems in Glen Walter, Green Valley, Lancaster and Kennedy/Redwood Estates, near Bainsville.
Councillor Lyle Warden reflected the general sentiment of his colleagues who felt that significant increases, which likely won’t be popular with residents, are nonetheless necessary.
“There should have been yearly increases all along,” said Coun. Warden. “It is a big pill to swallow, but we can’t keep putting it off. The sooner we get it over with, the better we’ll be.”
$100 more for water
The mayor added that further rate adjustments will occur once the munici- pality receives its completed capital report early next year.
“This increase will get us up to 2016, but when this study is done, then there’s going to be a recommendation, based on the volume of water that we’re selling on an annual basis, that we’re going to need so many cents a cubic metre to put towards capital... and at the same time, we’re going to try to get a really good understanding as to what our regular operating costs are.”
Based on the typical current bi-monthly user bill, consisting of a flat minimum rate of $116.49 (which provides 19.3 cubic metres of water), “We’re at about $700 per annum, and with a 15 per cent increase, that’s about another $100.”
The mayor also pointed out that the delivery of water to consumers hooked up to the township’s four residential systems has to be looked at from both capital and operating perspectives when any rate adjustments are being considered. “Those are the two components that we have to keep in mind,” he stated. “We have our normal operating costs, which is what it costs us no matter whether we sell 100 gallons of water or 10,000 gallons. We have the labour costs, for equipment, chemicals. All of those are virtually consistent costs. That total is the base number that we need to operate.
“Over and above that, we always have to be looking towards the future as we do with all our other services – fire, roads, and everything else – budgeting for next year and the year after that whether we have to buy new water lines, or a pump, whatever it is. That’s the capital.” An instant 40 per cent increase had been initially proposed last week. However, general manager of corporate services/treasurer Mike Samson dismissed that suggestion, noting a lower figure, though substantial, would be a lot more palatable for consumers.
“I think the 15 per cent could be defendable and explained by the fact that we haven’t increased rates in six years,” said Mr. Samson.
“Then you’re going to have a (new) capital plan in 2017. After that you can increase the rates again, this time with the capital plan in your back pocket. You can use the capital plan to explain why you’re going up 20 per cent, 30 per cent... whatever. You have something to fall back on. But right now to say you’re going to increase by 40 per cent... The question will be. Why?’”
Councillor Bill McKenzie pointed out that a bylaw passed several years ago gives the treasurer the power to increase water rates “by a certain percentage, every year.”
Mayor McLeod, along with the township’s general manager of infrastructure services Ewen MacDonald, wondered if that ordinance could be invoked to remedy the current situation.
“Based on that bylaw, passed in 2010, could you use that yearly number, up to five per cent, and do an aggregate, and say, ‘Here’s what the rate is now,’ whether it be 20 per cent or whatever?” asked the mayor.
Mr. Samson said that wasn’t an option.
“It is in the bylaw that the treasurer could increase the rates, up to five per cent per year, by simply notifying council that it was going to happen,” he explained.
“The idea was to try to follow the cost of living. But that never happened, and the rates didn’t increase. Within the scope of the bylaw, it states that if the required rate adjustment exceeds five per cent, ‘ an approval by council resolution, in open session, shall be required,’” added the treasurer.
If passed, the 15 per cent rate increase (which would apply to both the minimum flat rate as well as the usage of cubic metres of water per billing period) will take effect as of the next billing date.
Deputy treasurer Lachlan McDonald says that sewage rates will also “quite likely go up in the future.”
The township’s 2016 water and wastewater budget, passed at last week’s meeting, is approximately $ 982,000. The 2015 budget was $972,000, while the actual, according to Mr. MacDonald, was $995,000.