April 13, 2011
Town OKs water, sewer
increase
by Vance Gutzman
Water and sewer rates in Deep River are on the rise, but not by much.
Town council passed a bylaw last week setting the water and sewer rates
for 2011.
Passage of the bylaw means sewer rates will increase by 2.1 percent,
effective as of this past January, bringing them from $426 to $435 per
unit.
Water rates, meanwhile, increase by 1.9 percent, from $539 to
$549 per unit.
Combined, the total annual water and sewer rate increase will be $19,
or a rate increase of 1.97 percent.
Although the increases are not drastic in nature, they are warranted
nonetheless, according to Councillor Chris Carroll, who chairs the
town's finance committee.
"There are things that are driving up our costs," Carroll told council
last week.
On the sewer side of the balance sheet, those things include a three
percent ($7,233) budget increase for the Ontario Clean Water Agency
(OCWA), which runs the town's sewage treatment plant.
The sewer budget also includes a 15 percent utility increase for hydro.
That translates to $8,500 and is necessitated by the fact hydro costs
for the sewage treatment plant were 11.5 percent, or $6,479 over budget
in 2010.
The sewer budget also reflects an increase in debt repayments of
$27,494.
Those repayments include the Bank of Montreal loan that was taken out
in 2007 to pay for the costs of constructing the new sewage treatment
plant. The balance of that loan, as at the end of December, was
$3,012,758.
The debt repayments also include a 40 percent share of the $704,000
debenture the town took out with Infrastructure Ontario last year to
help pay for the Ridge Road infrastructure project.
The water budget, meanwhile, reflects a $5,591 increase in the cost of
OCWA's contract, as well as a whole new contract with OCWA which sees
the operational and maintenance responsibilities of the town's water
distribution system transferred to that company.
The decision to render that service contract was actually made by the
former council last fall, but was only formalized last week, when
council passed a bylaw entering into a two-year agreement with OCWA.
The agreement will see the town pay OCWA $37,447.56 for this year's
nine-month period and a base monthly cost of $4,160.84 in 2012.
Like the sewer budget, the water budget also includes a hydro increase,
of 5.1 percent, and it also reflects a 40 percent share of the $704,000
debenture with Infrastructure Ontario for the Ridge Road project.
The water budget also reflects another loan that was taken out with
Infrastructure Ontario in 2009 to help pay for water treatment plant
upgrades
With a 40-year amortization, the balance on that loan, as at the end of
December, stood at $4,190,959.
Future needs
Escalating costs aside, the finance committee also had to grapple with
future infrastructure demands as it prepared the water and sewer
budgets, neither of which include life-cycle replacement costs.
"The big issue we wrestled with was the capital reserves for the water
treatment plant," Carroll said.
"It's vexing. We're already at significantly high rates, at least
compared to what we were used to. The experts would tell you we're not
high enough.
"As far as setting aside reserve money, we'll have to deal with that
going forward. It will probably mean higher rates in the future unless
we get more users on the system."
Mayor David Thompson concurred with that sentiment.
"It's a prudent budget with a very reasonable price change," Thompson
said.
"Long-term, we need to think of putting more money aside. And we'll
need to attract more users to our water system, which will help defray
our costs."
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