Fredericton council tentatively agrees to water rate hike
Fredericton city council tentatively approved a water rate increase for 2018 at the council-in-committee meeting on Monday night.
In a report on the city's water and sewer utility, assistant finance director Alicia Keating said the infrastructure is "rapidly aging" and if it isn't fixed soon, there will be expensive problems.
The utility has to generate its own revenue for the repairs, but it has run into problems. It doesn't have the revenue to do so, partly because people have been more frugal with their water use.
"We're not paying the cost of the service that is being delivered," said Coun. Greg Ericson, chair of the city's finance committee. "We're putting a bunch of this off on future generations.
"Until we start to balance the revenues that the system generates with its expenses, we're not actually paying for it in a responsible way."
Keating recommended the quarterly fixed service fee be raised, so regardless of how much customers save, they'll have to pay more. The challenge with that is that 81 per cent of the cost is fixed, and only 19 per cent of it varies with water use.
The increase would be equal to $13.06 each quarter, and since it would only start in quarter two, customers would end up paying $39.06 more in their service fees in 2018, on top of the cost of the amount of water they use.
The rate would continue to increase incrementally over the next five years. By 2022, if the rate increase continued, customers would pay $70.70 more a year in service fees than 2017.
Reluctantly put through
Though council did tentatively agree to the increase, there was opposition.
Coun. Kevin Darrah was one of two councillors who voted against the rate change. He felt the raise was too much.
"We have an aging population in New Brunswick, which means we have an aging population in Fredericton, and they're all on a fixed income," said Darrah.
He said perhaps a $6 or $7 increase per quarter might be a better option.
Deputy Mayor Kate Rogers voted in favour of the increase, but she said she was, "very uncomfortable supporting it," as she was worried about the impact the price increase could have on some customers.
The final decision on the increase will be made on Oct. 23 when it will go before council. If it's passed then, it will still have to be approved with the city's 2018 budget in December.
"Tonight we're just deciding things in principle, and so there's going to be many opportunities to come back and revisit the numbers," said Ericson.
But Ericson said if the utility doesn't have the money to make the necessary fixes, it will bring other costs.
"As more and more of the infrastructure [ages] beyond its lifespan, then it becomes more prone to catastrophic failures, which subjects the community to inconveniences, unplanned construction, and potential water outages and boil orders," said Ericson.
