On September 18th, 2006 Council passed a bylaw on a waterworks rate policy.

Under the waterworks rate policy resolution, the per 100 gallon water rate of $0.73 will continue, as adopted under the water bylaw dated May 16, 2006, but to work toward waterworks revenues that cover waterworks operating costs, beginning January 1, 2007 Council will raise the per 100 gallon water rate by 15% for 2007 and 10% for the following 3 years.  At the same time, Council will closely monitor waterworks expenditures.

Rates will be examined each year to ensure that waterworks revenues cover waterworks operating costs.

By planning the waterworks rate increases ahead of time, residents and businesses will be able to prepare for and adjust to the increases.

The $.73 per 100 gallon water rate that was established in May, 2005 was chosen to be an acceptable rate for residents and businesses at that time.  The per 100 gallon water rate does not generate enough waterworks revenues to cover the waterworks operating costs.  The rate covers about 96% of the waterworks operating costs, with the other 4% of the operating costs being covered by funding from the general revenue fund.  Waterworks operating costs, or expenditures, include waterworks’ staff salaries, benefits and training; power; telephone; fuel; heat; insurance; chemicals; repairs; maintenance; supplies; etc.  Also, the per 100 gallon water rate does not include an infrastructure charge.  Some municipalities use an infrastructure charge to collect revenue that is put into reserves so that they are able to address waterworks infrastructure problems that arise and replace aging waterworks infrastructure as required.

Below provides the planned per 100 gallon water rate increases of 15% in 2007 and 10% in 2008, 2009 and 2010.  To demonstrate the impact on residents, below are estimated monthly charges that reflect the rate increases, which are based on the average household consuming 3300 gallons of water each month.

The objective of the waterworks rate policy is to work towards waterworks that are self-financing, where the users pay for the cost of the service.  To accomplish this, waterworks rates need to increase over time so that the revenues cover operating costs, to the extent possible.  At the end of each year of the planned rate increases, Council will review its waterworks policy to determine if revenues are covering costs.  They will also review waterworks rates to determine if waterworks infrastructure reserves will be sufficient to cover upcoming replacement and maintenance costs such as replacing the Water Treatment Plant in approximately 2015 which was identified as a need in the 2005 waterworks assessment required by The Waterworks Regulations, 2002.

The waterworks rate policy will work towards financially independent waterworks that do not have to compete with other key municipal financial demands under the municipal general revenue fund.  This will ensure our waterworks can provide safe drinking water.  Also, rates that cover costs will influence consumer demand and water conservation, and self-financing waterworks will reduce pressures on property taxes.  Reduced funding for the waterworks from the general revenue fund will be reflected in future mill rates.