Rejecting staff recommendations on water and wastewater rates for Lansdowne residents, Leeds and the Thousand Islands council has opted for a 3.5 per cent increase for the next 18 months to two years.
The timeline was chosen in an effort to buy time for the township to refine its asset management plan and get a better understanding of water and wastewater asset replacement needs before revisiting rates.
"Looking at the rates some of our commercial establishments are paying, I think it would be irresponsible to raise the rates by 10 per cent, given the kind of year it's been and likely to continue for some time yet. I think 18 to 24 months will be enough time to gather more detailed information to better inform a future decision," said Coun. Terry Fodey.
The 3.5-per-cent increase will mean ratepayers will see an additional $5.08 per month on their water and wastewater bill in addition to a reduction in the monthly minimum billing threshold from 20 cubic metres of water to 15 cubic metres per month per household.
Staff's recommendation to move to a 10 per cent increases per year for the next 10 years, while steep, comes directly from the recommendations of the consultants Watson and Associates and is based on the provincial requirement that water and wastewater services be funded by ratepayers.
"We all know that 10-per-cent increases only put us in the position that after 10 years we will have full replacement cost rates – it's a full cost recovery rate plan," said Coun. Brock Gorrell, who later abstained from the vote on the grounds that there needed to be a more fulsome debate on the issue before he could made a positive decision.
A 10-per-cent increase for the next 10 years would also essentially double water and wastewater rates by the year 2030.
"It's a matter of balancing increases with building reserves to handle replacement costs. If we don't have the money in reserve to pay for replacements or repairs we will have to borrow the money and that increases operating costs as well," said director of finance Kate Tindal in explaining her recommendation.
It should be noted that council was under a time crunch to make a decision so that the township could renew its already delayed provincial water and wastewater license.
Following the first presentation of the water rates study, staff revised some of the assumptions with new data it was able to collect and came back with three scenarios.
Scenario one would see base rates increase by 10 per cent per year over the next 10 years to recover full-life-cycle funding by 2030; scenario two proposes five-per-cent increases to the base rate for 10 years to achieve 75-per-cent of full-life-cycle funding by 2030; scenario three, with a 3.5-per-cent base charge increase annually, will recover 55 per cent of full-life-cycle funding by 2030 according to Tindal's report to council.
"Water and wastewater are to be self-funded. So the revenue collected, mainly through user charges (also connection charges, late fees, etc.) needs to be able to fund the operating and capital costs of the water and wastewater systems," said Tindal, adding it cannot be funded from other sources such tax or casino revenue.
The seven-member council mulled over the implications to residents and the municipality and examined potential mitigations, including attracting more development to Lansdowne to spread the rates over a larger population, and getting a better handle on the water and wastewater assets and their expected lifespan.
"A fair amount of the infrastructure is new, so while it's important that we recover the costs, we need to see what the real numbers will be," said Coun. Brian Mabee.
In the end, council opted for scenario three, with the caveat that rates would be revisited in no more than two years to give staff the necessary time to collect more detailed data on the infrastructure needs of the water and wastewater system in Lansdowne.
"If we have to change the rates once we have more data, then we can do so," said Mayor Corinna Smith-Gatcke.
Heddy Sorour, Local Journalism Initiative Reporter, Brockville Recorder and Times