November 18, 2009Water rates to keep going upby Terry MyersWater rates in Deep River will be going up, and up, over the next few years. And, water meters are no guarantee you will pay less for your water use. Those were the two main findings of an updated report presented to council last week by Gary Scandlan of Watson and Associates Economists Ltd., a private consulting firm. Scandlan prepared a forecast of Deep River's water and sewer rates back in 2003. At the time, his estimate was that rates would more or less double, from $524 that year to $1,004 by 2008. The rates haven't gone quite that far. This year's rates are $420 for water service and $496 for sewer, for a combined total of $916. But Scandlan said those rates - at least for water - will have to go up in 2010 as the debt charges on the town's new water treatment plant kick in. Scandlan said that, just to cover those debt charges and the regular operating costs of the water system, the water rate will have to go up by about $117 next year, to $537.62. He said there is actually room for the sewer rate to come down, if the town only wants to pay to cover the cost of operating. The sewer rate could drop to $430.10 in 2010, putting the combined charges at $967.72. “That's not bad,” he said. According to his projections, the rates would continue to creep up year by year, to $1,028 by 2014 and $1,110 by 2019. Where it gets interesting, however, is when it comes to so-called “lifecycle” reserves. The province passed the Sustainable Water and Sewage Systems Act in 2002, in the wake of the Walkerton water tragedy. The Act would require municipalities to move to “full cost” pricing for their water and sewer systems, meaning they would have to start putting money into reserves to pay for replacement of their water and sewer infrastructure. So far, however, the province has never brought in regulations to put “full cost” pricing into effect. In Deep River's case, Scandlan said the town's water and sewer systems are worth $21.5 million - not including the water and sewer plants. That means the town would need to be putting aside a total of $707,000 a year in lifecycle reserves to meet the province's target. Phasing in the cost of those reserves would mean much higher water and sewer rates. In 2010, for example, Scandlan said water rates would go to $561.82 and sewer rates to $506.94 - a combined total of $1,068.76, or roughly $100 more than without the reserves. Rates would hit a total of $1,224 by 2014 and $1,443 by 2019. continued... |
>> Back to homepage