City Council approved a water meter rate structure put forward by Coun. Derek Shogren that will recover the city's costs based on a 60 per cent fixed, 40 per cent variable structure for residential users and a fixed connection and minimum consumption fee for the ICI sector, effective September 1, 2015. PHOTO BY LIAM BERTI
Some councillors call it a starting point, others are just happy to move forward with any consensus at all.
But after a long, drawn out deliberation process, City Council has reached a decision on the new water meter rate structure.
As of September 1 of this year, residential property owners’ water bills will be based on a 60 per cent fixed, 40 per cent variable volumetric cost recovery model.
On the other hand, the institutional, commercial and industrial users will be charged based on the current basic connection fee with a minimum consumption fee.
In an attempt to help residents adjust to the drastically new system, customers will be able to monitor their consumption data via an online bill estimator as of July 1.
Electronic monthly billing will then be implemented in January 2016, while those who choose to stick with billing through regular mail will be charged a monthly paper-billing fee.
At the time, Coun. Derek Shogren urged his colleague to find some consensus on the matter before it reached the final vote.
One week later, after taking charge around the table and tweaking Forgette's model with an amended motion, Shogren’s compromise passed by an 8-3 vote on Monday. Councillors Mark King, Mike Anthony and Mac Bain made up the minority in voting against the motion.
“This was designed to try and bridge the gap between the original amendment and taking the concerns we heard around the table, as well as citizens, to try and get some consensus,” Shogren explained.
“July and August being some of the heaviest usage months, we thought it was important that people get a chance to see how expensive these bills would be before we go straight to the metered billing,” he added.
Based on that model then, each residential unit would pay $31.06 per month for the fixed rate plus $1.45 per cubic metre of water used in the cost recovery model.
The plan, for now, is to revisit the rate structure and adjust to a 50/50 ratio in 2017 and a 40 per cent fixed, 60 per cent variable come 2018.
“It’s not perfect for our first try but, fortunately, we’ve built in the ability for it to come back to us and, as a council, we can always change things down the road,” said Coun. Daryl Vaillancourt.
Council listened to three more passionate public presentations before the ultimate vote, with some familiar faces urging council to address the inequity between the ICI/multi-residential and the residential classifications.
Just last week, the city’s chief financial officer, Margaret Karpenko, told council that the residential sector is paying approximately 73 per cent of the revenue required for cost recovery, but only accounting for 51 per cent of the water usage.
The ICI/multi-residential side, on the other hand, uses the other 49 per cent of the water, but is paying roughly 27 per cent of the cost recovery revenue.
As local Gary Gardiner argued in his third public presentation on the matter, residential users are heavily subsidizing commercial and industrial users.
Even the new system, he said, is just a continuation of the status quo and the discrepancy remains, protecting the large users from bearing the true cost of their water usage.
Citing information from the original Hemson Consulting Ltd. report, Gardiner said the ICI/multi-residential sector will actually see a significant reduction in their fixed water costs and are the "big winner" in the new system.
In one of his examples, Gardiner said whereas a typical residential user would expect to pay $31 a month in fixed rate, a large multi-residential unit could work out to be around $7 per unit each month.
“The inconvenient truth of the current proposal is the residential sector will pay $9.2 million more per year for, basically, the same amount of water that is used by the other side," said Gardiner.
“I strongly suspect that there are a few people in this city who own a large number of condo and apartment complexes who have been underpaying water fees for many, many years," echoed fellow presenter Karen Anderson, "and that these very wealthy and influential people want to keep the status quo.”
Before casting their vote, multiple councillors said they were unsatisfied by the amendment not addressing that inequity.
In an attempt to strive for a more balanced system of charging for the water consumption, Shogren's motion states that Council will annually review opportunities to make adjustments in the distribution of the water costs.
But that process is expected to take until 2025.
“There is nothing concrete, whatsoever, to address the imbalance of the two sectors,” said Coun. Mark King. “I don’t see any firm commitment in addressing this issue. To suggest that we take 10 years to address it is not good enough in my mind, we need to do something about this now.
“I can’t, for the life of my as a resident here in the city, understand how we can support something that suggests that the residential sector subsidizes hospitals, hotels and condominiums,” King added. “It just makes no sense to me whatsoever.”
Coun. Bain echoed that sentiment.
“I would hope there would have been more to address the disparity with the ICI sector and that there would have been a definite plan to move forward; I don’t see that in this resolution,” he said to his colleagues.
After it was revealed that the city wastes up to 40 per cent of its water supply through aging infrastructure and regulatory requirements, the amended motion also calls for regular updates from city staff about the progress being made to reduce the amount of wasted water.
