The Town of Gibsons is pumping up its water rates by 15 per cent, but the new rates are still below the flat rates charged to residential customers in 2010.
“Yes, 15 per cent is a significant increase, but you have to keep in mind where we were starting from,” director of finance Ian Poole told council’s committee of the whole March 12. “Those rates were not enough.”
The new rates will come into effect April 1, pending final adoption by council.
An average single-family residence will pay $42.67 more — with the total water bill increasing from $284.49 to $327.16.
The same residence was charged $370 in 2010 under the flat rate system that ended after universal water metering was implemented, so “they’re still paying 12 per cent less” under the new rates than they were in 2010, Poole said.
Rates for an average multi-family or strata unit will increase from $282.30 to $324.65 — also 12 per cent less than the $370 flat rate charged in 2010.
Poole said water rates for the last two years were not sufficient to balance the budget or put any funds into reserve for future asset management.
“What we’ve learned is that people have become much more conscious and are cutting back on their consumption. We’ve had two successive years where our revenues have failed to generate a surplus,” he said.
Staff also presented two multi-year scenarios — one raising rates by 15 per cent in the first year, 10 per cent in the second and third years, and five per cent in the fourth year, and the other scenario keeping the 10 per cent increase in place for the fourth year.
“We’re going to have some significant rate increases over the next couple of years,” Poole said.
Coun. Lee Ann Johnson said she could support the increase for 2013, but only if council reviews the rate structure to make it more equitable in future years, as “commercial water users are not paying anywhere near their fare share,” compared to multi-family/strata corporation users. A water rates study last year identified strata users as contributing closest to the average cost of the service, followed by single-family residences and commercial users.
“That continuing inequity is a subsidy to our commercial water users and it’s a subsidy on the backs of our residents,” Johnson said. “I realize the sticker shock will be severe for commercial users, but it’s something they have to know about.”
Poole acknowledged the various scenarios proposed by staff focused on the water system’s revenue requirements, but “still leaves the issue of equity at bay.”
Councillors agreed to start looking at the equity issue for the 2014 budget.
Under the examples provided by staff, a heavy commercial water user who paid $5,632.04 in 2012 would pay $6,476.85 this year — almost a 73 per cent increase from 2010, when the same customer was paying $3,748.70.
While Mayor Wayne Rowe said the 2013 rates show a move toward greater equity, Coun. Dan Bouman said the comparison with 2010 rates was an eye-opener for him.
“What this shows me is that the residents — particularly the single-family dwellings and the multiple-family buildings — have been subsidizing commercial operations in the town extensively for quite some time. So in effect they’ve had a terrific benefit here over these last years,” Bouman said.
Dealing with water rates is “just a matter of getting our heads out of the sand,” said Coun. Gerry Tretick. “This council has the unpleasant task of delivering the real message, and the real message is if you want a good water system, you have to pay for it.”
For general operations, the committee agreed to a three per cent hike in property taxes, with some of the additional funds to cover increased costs of operations, wages and fuel, and the balance to be placed in reserve for asset replacement.
Council also directed staff to prepare bylaws that will increase sewer rates by two per cent to generate reserve funds, and will raise the garbage fee levy by $3 to $123.50 to cover tipping fee increases by the Sunshine Coast Regional District.