Water, sewer utilities will increase in 2024: City Finance
By Timothy Schafer Local Journalism Initiative Reporter
Contrary to gravity and the laws of plumbing, water and wastewater will be going up this year.
Three City utilities will be going up this year — City council decided officially at its Jan. 9 regular meeting — with water and wastewater rates, as well as resource recovery rates, increasing in the utility budget after a staff review.
Council indicated during the meeting — and in pre-budget meetings — that it was comfortable in the planned inflationary rate increases of 2.5 per cent for water, two per cent for wastewater and a $25 increase for resource recovery rates for all users.
Considering the current year projected results, and future operational and capital requirements, the financial pressure from increased inflation and supply chain challenges drove the increases, said City deputy chief financial officer, Aimee Mooney, in her report to council.
“The rates charged for water, sewer, and recourse recovery must be sufficient to cover operating and capital costs as well as build adequate reserves to fund future capital expenditures,” she said. “Water, wastewater, and resource recovery are core services of the City and must be managed to ensure that these services can continue to operate into the future. The overall revenues will cover the projected cost increases for water, wastewater, and resource recovery operating and capital costs for the next year.”
In 2022 City chief financial officer, Chris Jury, said the water and wastewater utility budget covered a lot of ground with capital projects, and the bill needs to be paid for that laundry list.
“What we have had in our plan for quite a few years is sort of that … increase for water and wastewater,” he said.
Including a 25 per cent rise in resource recovery costs — from $100 to $125 — the 2024 proposed utility rates will see a 3.9 per cent overall hike from 2023.
The 2024 capital projects included the Sewer Treatment Plant (STP) maintenance ($250,000), CIPP relining ($600,000), lift stations ($200,000) and a Liquid Waste Management Plan ($165,000).
On the water delivery end, 2024 capital projects include Five Mile pipeline replacement ($150,000), phase four of the finished water storage ($3.5 million), the reservoir dam inspection ($20,000) and watermain replacements ($600,000).
Jury said last year that the extra half of a per cent difference for wastewater comes out as $3 million when the city gets to the end of that wastewater treatment facility upgrade (or replacement) project. It could be $3 million less in borrowing, $3 million more in reserves, or it could just be a contingency piece that adds up over time, he added.
“I think we’ve done a good job of keeping those reserves, and fueling those reserves, and that we are able to do these projects,” Jury continued, “but also being conscious of the fact that we are in unusual times with inflation and what an impact that amount can make as we look out to the horizon as we shift to the two per cent, two per cent instead of the two per cent and one-and-a-half.”
The 2023 utility rate (combined) for a single family dwelling in Nelson was $1,334, while the proposed increase for 2024 would bump the figure by $52 per year to $1,386.
Transparency
On Oct. 27 and Nov. 9 budget working sessions were held to review and set the 2024 water and wastewater utility rates and resource recovery rates, with an overview of the actual and projected 2023 operating and capital results for the utilities.
As well, the recommended 2024 rates for wastewater and water in conjunction with the proposed operating and capital plan for the next 15 years were reviewed.
