The issue of utility rates will face the TNRD board again this fall, and that usually means increases for some users.
The Utility Systems Committee received a report from finance director Doug Rae on Thursday with recommendations for changes that would take effect Jan. 1 next year and set up a five-year program.
Rae noted that the TNRD manages 11 rural water utilities and two sewer systems, acquired from various owners over the years. In 2010, an Urban Systems report set out a strategy for future acquisitions and sustainability based on moving towards a phased-in user pay system.
Six years later, Rae says, TNRD utilities are still struggling financially.
Individual services still don’t bring in enough revenues to always fund costs, which continue to rise due to inflation. As well, Interior Health will require TNRD to provide filtration on water systems “in the near future,” and “more robust capital reserves” will be needed in the longer run.
He felt the parcel tax with which users pay for part of their service should be increased from $10 to $15 a month, and that the $100 cap on monthly tolls established in 2010 needed to be increased.
Here’s what he recommended that the committee propose to the full board:
- That parcel taxes currently charged to all active parcels within each utility service area (water and sewer) to fund “Other Indirect Costs” be increased to $15 per parcel per month, effective Jan. 1, 2017.
- That where parcel taxes charged to all active parcels within each utility service area exceed actual “Other Indirect Costs” incurred in any given year be transferred into a Utilities Capital Reserve fund.
- That utility user fee rates in each utility service be increased sufficient to fund expected direct cost increases over the five year period from 2017 to 2021 as detailed in Table 3 (Option 1), effective January of each year. OR
That utility user fee rates in each utility service be increased sufficient to fund expected direct cost increases over the five year period from 2017 to 2021 as detailed in Table 4 (Option 2), effective January of each year.
- That the current user fee cap of $100 per month maximum be indexed for inflation and increased to $125 per month, effective Jan. 1, 2017.
Rae said some other regional districts charge direct labour costs based on the average calculated from the total cost to service all utilities, rather than on expected staff hours for each.
“Using this method, each user of the service is effectively charged the same amount for labour as every other user, regardless of which service area they are receiving the service from,” he wrote in his report.
“In general, the TNRD would see small increases in user fee rates for the larger water systems that have more connections but would see significant decreases in rates necessary in the smaller systems.”
This is the option (Option 2 in Table 4) chosen by the committee in approving Rae’s recommendations for referral to the board. I felt the matter should be tabled for more details on other options that were brought up at the meeting but I didn’t get any traction on that, so I voted against the motion, which was approved 5-2.
Below are the two options submitted by Doug Rae on monthly user fee rates.
The second option certainly looks like the better of the two — I simply wanted to see more options. I’ll discuss the situation further with staff before I decide how to vote when the recommendations come to the full board.
You’ll see from the two tables below that there are no numbers for Paul Lake, since their sewage disposal system is funded totally via parcel taxes (I’ll deal with the Paul Lake situation in a future article).
You can also see that under Option 2, only Evergreen and Maple Mission would need a minimal subsidy if fee rates are capped at $125 a month.
I highly recommend, especially to those on water or sewer systems, reading the full report. You can find it under Board-Agendas-Committee Agendas-Utility Systems Committee on www.tnrd,ca, or try this direct link https://tnrd.civicweb.net/FileStorage/F54467225882421BAC9894BE2E16FD91-Report%20RE%20Utility%20Systems%20Rate%20Review.pdf