Water and Sewer Rates: A Change is Gonna Come...

Andrew Zwicker
By Andrew Zwicker
March 4th, 2009

Homeowners in Rossland likely noticed a pleasant surprise in January this year when they didn’t receive their annual water and sewer bills in the mail. No, the city didn’t have a compassionate moment, considering the economic downturn, and decided to provide free water and sewer this year. Rather, water and sewer bills have been delayed until the current and ongoing discussion around developing the new rate system is concluded.

This past Monday night at a special meeting of council, new bylaws regarding water and sewer were one of two items on the agenda. After lengthy discussions, bylaw #2433 –Water Rate Bylaw 2009 and bylaw #2434 – Sewer Rate Bylaw were both read unchanged a first, second and third time.

The two bylaws will now come before council at their regular meeting on Monday, March 8th for final reading before being adopted officially by the city. The city then expects to have the bills in the mail for April 1st.

Three main issues were identified in determining the new rates for 2009 as outlined in a memorandum from City Finance Manager Deb Timm to CAO Ron Campbell.

The first issue was around two groups: homeowners who are not full time residents with installed water meters and new construction (such as the condominiums at Red Mountain that were required to install water meters). In 2007, city staff identified a problem with these two groups as the water structure at that time had only a base rate meter charge of $6.00 with the remaining charges based on water usage. These same groups’ sewer rates were also based on water usage with no base rate, meaning that the homeowner of one of these units, if not living in Rossland, could pay as little as $72.00 per year for water and sewer if they didn’t use any water.

“That rate structure didn’t help the City pay for the repairs, maintenance and operations of the systems,” Timm wrote in her memo.

Multi-unit residences were also examined. Many apartment owners in town have stratified their buildings so that each suite has a separate owner, but many of those buildings are still on one water meter. In an attempt to create fairness in the system, staff decided on a per-unit cost to “help provide equity between homes in old town Rossland and condos at Red Mountain since both would be classified as a unit whether they had one meter per building or meters for each unit,” wrote Timm.

The City’s bylaw-mandated goal of moving all Rossland homes over to a metered system over three to five years and the accompanying rate structure of paying a reasonable base rate for water and sewer along with a water usage fee was implemented in 2008. Moving whole-shot to that system would have created a dramatic rate increase for multi-unit buildings. Similarly, provincial law stipulates that apartment landlords can only raise their annual rent by 3% per year; a phase in period was instituted whereby each unit would pay 1/3 of the rate in year one, 2/3 in year two and full cost by year three. 2009 would have seen the rate increased to 2/3 of full cost but under the revised rate structure each per unit customer will pay 70% of the base rate rather than 67% and the rate will not increase by the remaining 1/3 in 2010.

Part of the reasoning behind sticking with the 70% rate was the belief that many people living in multi-unit buildings are lower income families. This of course does not jibe with the multi-unit buildings being constructed at the base of Red which are not low income housing. The city’s rationale was that, “Multi-unit customers who live at Red Mountain…often do not use their properties year round so are not impacting the system all year.”

The value of having non-profit multi-unit buildings in town used by seniors and special needs groups was recognized under the new rate structure with their per-unit rate being set at 50% of the base rate. Seniors also will receive a $40 per year per unit discount on their water rates.

Under the proposed new rate structure, the water rates of non-metered single family homes will be rising from $322.00/year to $357.00.year and their sewer rates would actually drop from $255.00/year to $251.00/year. The change boils down to $2.58 more per month in 2009 than 2008.

In comparison, a single family home with a water meter will pay significantly less depending on its water usage levels. Assuming 30 cubic meters of water usage, the average metered single family homes water rate will rise from $222.00/year to $273.00/year in ’09 and their sewer would rise from $240.00/year to $251.00/year in ’09. This comes down to a $5.17 increase per month but still comes in substantially lower than the rates paid by unmetered houses.

Please see the attached file for a comparison of proposed 2009 water and sewer rates compared to 2008 for the various types of housing.

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