Thursday April 17, 2014

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Regional water rates set to climb

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Annual water rates are set to rise by just over $20 next year for the typical residential user in the Sunshine Coast Regional District (SCRD), while metered commercial users will be hit with an average increase of $68 per month.

Annual water rates are set to rise by just over $20 next year for the typical residential user in the Sunshine Coast Regional District (SCRD), while metered commercial users will be hit with an average increase of $68 per month.

The rate hikes will be the first of seven proposed increases until 2020 under a plan to start setting aside capital funding for the regional water system.

For residential users, the projected 4.7 per cent hike will raise the annual water bill to about $481 and is in line with increases seen in recent years, said Bryan Shoji, the SCRD’s general manager of infrastructure services.

“For the last four years, it’s been about four per cent, so it’s pretty much the same, which is quite good because this rate increase includes us putting money into reserves for asset replacement,” Shoji said. “We’re actually quite happy with the results, considering we have $166 million in assets that we have to budget for as they reach the end of their service life.”

Under the plan, annual residential rate hikes from 2015 to 2020 are projected to come in slightly lower than next year’s increase.

“After 2020, the rate should go up at the rate of inflation, based on this model,” Shoji said.

Industrial, commercial and institutional users will see an almost 19 per cent increase in the metered rate next year, but that amount is “more of a catch-up,” Shoji said, noting that increases in the metered rate are projected to drop steadily in 2020.

Designed by Opus DaytonKnight Consultants, who developed the comprehensive regional water plan adopted by the SCRD board in June, the new rates will take effect on Jan. 1 pending the board’s final approval and are “still subject to fine-tuning,” Shoji said.

The recommended rates were passed by the infrastructure services committee on Dec. 5, with West Howe Sound director Lee Turnbull and Elphinstone director Lorne Lewis both opposed.

Turnbull said she did not want to hit Area F residents with a water rate increase when all the near-term capital upgrades were planned for the Chapman system.

Construction target dates from 2018 to 2020 for the smaller systems at Soames Point and Eastbourne “are way too far in the future, as far as I’m concerned,” Turnbull said. “I will not be voting for this water rate because I believe there are people in my area who are not getting value for their money.”

Shoji said replacement projects are timed for the expiry date of the asset and not based on balancing expenditures among the areas.

The rate schedule was calculated on a conservative growth rate of half of one per cent and did not include development cost charges, which will be addressed in a separate report next year.

The consultants report suggests annual review of the rate changes, noting the implementation of universal metering in 2015 and the conversion from fixed user fees to metered rates in 2017 “may result in unexpected changes to usage and thus changes to revenues.”

Consultant Gurjit Sangha said the regional water system currently has a backlog of about $5 million in assets that need replacing.

“Your utilities are underfunded and it will take time to bridge the gap,” he told directors.



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