Size might matter when it comes to water billing

David Euler, the city's managing director of Engineering, Environmental and Works, agrees with the Water Rates Review Committee that water billing based on meter size is a simple system that could be a more equitable method of charging customers. PHOTO BY LIAM BERTI

Apparently size does matter.

At least if you ask the Water and Sanitary Sewer Review Committee, that is. 

Monday night marked the committee’s second meeting, where the politicians decided to move towards a water billing structure that takes water meter size into consideration. 

After settling on moving towards a billing system that charges water users the same rate per cubic meter of water consumed a fortnight ago, the committee took more progressive action towards a more sound system.

According to the presentation delivered by Margaret Karpenko, the city’s chief financial officer, on Monday night, the fixed portion of the new bills would vary from $34.55 per month for a 5/8-inch or 3/4-inch connection and could go as high as $725.60 per month for units with a 6-inch connection.

City staff have also been directed to identify a sample of multi-residential and condominium complexes that, if assessed a fixed rate for every unit in the building, might make the water billing system more fair for the typical residential user.

In the current system, those similar type units are assessed one flat rate charge, the same way a single detached dwelling would, for however many units are in the building.

“We seem to be headed in the right direction,” committee chairman George Maroosis said after the meeting. “The staff seem to be happy with this and it’s quite different than what we approved in the process in the regular committee structure.

“Our mandate is to come up with a fair and equitable system and I can tell you that we agreed to [in May] was not a fair and equitable system,” he added.

During the initial water-billing debacle, council discovered that the residential sector is paying approximately 73 per cent of the revenue required for the city’s cost recovery, but only accounting for 51 per cent of the water usage.

On the other hand, the ICI/multi-residential sectors use the other 49 per cent, but pay roughly 27 per cent of the cost recovery revenue.

After numerous public presentations and insight into the inequities, Mayor Al McDonald set up the special review committee and set them on a quest to try to find a more equitable billing system.

Now, the committee feels that the meter size variable and the consistent rate of $0.99 per cubic metre consumed is a move in the right direction.

“It appears that we are going to be moving towards a rate that will be affected by the size of the water meter so that homes that have the smallest installation will be at the lowest base price and buildings that have larger water lines…will pay more in fixed costs,” Maroosis explained.

Coun. Mac Bain voiced his opinion in saying he would be happy with charging based on meter size for the industrial, commercial and institutional classes, but sees a real problem in neglecting to charge each unit within multi-residential complexes a separate flat charge each.

Under that scenario, the corporation representing the building would likely be sent a single bill, which they would then divide by the number of residential units in the building.

Bain and co. said rather than going door-to-door to determine who has a single basement rental unit, for example, they would rather target the buildings the city knows for sure are multi-residential and condominium complexes to lay the groundwork of the system.

“The beauty of using meter sizes is the simplicity,” said David Euler, the city’s managing director of Engineering, Environmental & Works. “If we picked five or ten typical condominiums and looked at the size of the meter and compared that to the number of dwelling units…we might find that meter size is a decent representation.”

Euler and his team have been tasked with gathering that sample and presenting their findings to the committee in two weeks time.

City staff presented a range of other billing scenarios and the impact each would have on the ratepayers on Monday night, one of which ignores property classes altogether. 

But as the committee unanimously agreed, that system would ignore the obvious inequity of an entire large multi-residential unit, for example, paying the same flat fixed rate as a single-family detached dwelling.

The group also considered a declining-block flat rate structure that would essentially provide volume discounts, but chose to discuss that at a later date.

As it currently stands, a new water meter billing system is set to start on September 1, under which each residential unit will pay $31.06 per month for the fixed rate plus $1.45 per cubic metre of water used in the cost recovery model.

The institutional, commercial and industrial users, on the other hand, will be charged based on the current basic connection fee with a minimum consumption fee.

Regardless of the cost recovery model, the city needs to raise just over $12.3 million from water rates to run the the revenue neutral system.

As per council’s decision in May, the system set to start in September will recover $7.06 million of that total from the fixed rate, with hopes of raising the remaining $12.3 million from the variable rate based on volumetric cost.

But if Maroosis and the committee gain more ground in balancing the system, that structure could be short lived.

Ultimately, the plan is for the team to bring their recommendations forward to council for a vote by early September.

The committee plans to meet again in a fortnight, on July 14. As was the case on Monday, members of the public are welcome to attend the discussions.

What do you think? Is the committee onto something by investigating how equitable a system based on valve size will be? What system would you like them to consider?