Water rate hikes to vary under equity plan

John Gleeson/Staff Writer / Staff writer
March 1, 2014 01:00 AM

Gibsons council is moving forward with a plan to raise water revenues by 10 per cent this year - but rate increases could range from three per cent for multi-family properties to 15 per cent for high-use industrial-commercial-institutional (ICI) properties.

Gibsons council is moving forward with a plan to raise water revenues by 10 per cent this year -but rate increases could range from three per cent for multi-family properties to 15 per cent for high-use industrial-commercial-institutional (ICI) properties.

The 10 per cent overall increase -recommended in a report prepared by J.P. Joly of Econics Consulting -follows last year's 15 per cent increase and is part of a five-year plan to start budgeting for eventual replacement of water infrastructure.

This year's plan, however, attempts to rebalance rate equity between the various categories of users.

Under a sample of customer billings that includes parcel tax, base fee and the tiered rate, a median multi-family user would see an annual increase from last year of $9.70 (three per cent), single family would rise $32 (nine per cent), a moderate-use ICI property would pay $74 more (12 per cent) and a high-use ICI customer would pay $962 more (15 per cent).

Presenting the plan to council on Feb. 18, director of finance Ian Poole said all customers will see a two per cent parcel tax increase and then variable rates and base fees will be different for each customer class.

"I can't say exactly what it will be for each customer because his invoice or bill is also a reflection of the consumption for that particular period," Poole said.

Mayor Wayne Rowe noted the urgency of increasing water revenues.

"The replacement cost of the water infrastructure in the town is $18 million. We currently have $2.6 million of debt in that fund and we have reserves of $145,000 and development cost charges of about $40,000," Rowe said.

"And based on where we're going at the moment, those development cost charges will be completely depleted next year and we'll be negative $265,000," he added. "So council's working very hard to try to get it on a track that will make our water system sustainable."

Coun. Charlene SanJenko encouraged members of the public to read Joly's report and if they have questions, to ask Town officials.

"It's not that your water rates are just increasing by the percentages they are," SanJenko said. "It's that we're basically having to reinvest in our town. That's what we're doing and it's really important that the community understands where we're at and what we need to do."

It's not just the public that needs to be educated, but other local governments as well, Coun Lee Ann Johnson said.

"It's clear to me at the regional district that directors and staff did not understand that the cost of water is in the pipes," Johnson said. "There is a lack of information about the true cost of providing infrastructure."

Council approved the 10 per cent revenue increase through rate equity adjustments and Poole said the motion would be rolled into a fees and charges bylaw that will come back to council for consideration at its March 4 meeting.

At the same meeting, council approved moving ahead with a nine per cent sewer parcel tax and user fee increase for the coming year, again based on a study by Joly addressing asset replacement costs.

"This is so the sewer system can start to generate the required funds not only for ongoing replacement costs but to set up reserves," Poole said.

Rowe said a large portion of the town's sewer infrastructure was put in place in the early 1970s, "and that's the infrastructure we have to be planning to replace in the next few years."

The current replacement cost for sewer infrastructure is $37 million, while the debt in the sewer fund is $1.5 million and reserves are about $745,000, Rowe said. "Those reserves are projected next year to be drained down to $170,000," while development cost charges are sitting at only about $60,000, he said.


© Coast Reporter

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