City councillor George Maroosis, chairman of the Water and Sanitary Sewer Review Committee, questions city staff alongside Coun. Jeff Serran during Monday night's meeting. PHOTO BY LIAM BERTI
More time is what they asked for, and more time is what they got.
Last Monday, on the night of their original deadline, the Water and Sanitary Sewer Review Committee asked council for an extension because of the amount of secondary issues that have popped up while trying to find a more fair and equitable water billing system across property classes.
But now the clock is ticking to finalize their recommendation to council.
The group met for the sixth time since their inception on Monday night, where they nixed the idea of a high-volume discount rate structure, returned to the notion of billing primarily by water meter size, and evaluated the phase-in structure of the overhaul.
Last week, the committee held a private in-camera session where city staff revealed exact data of heavy industrial and commercial users and the implications the new fixture-size system would have for them, starting in 2016.
Based on what they saw, the committee felt it worth investigating a declining block rate structure, whereby the per-unit price of water decreases as the consumption increases, with the idea of easing the burden for large consumers.
But adopting the high-volume discounts would completely erase the idea of every water user, regardless of property class or fixture size, paying the same rate per cubic metre of water.
Put simply, if the heavy users are charged less for what they use, the other end of the spectrum would have to make up for the revenue, skewing the ratios in the wrong direction for what the committee is trying to accomplish.
That was enough for the majority of the group to recommit to their idea that every user will pay the same rate for their usage, and the only discrepancy in billing will come from their fixture size.
Under a 60 per cent fixed, 40 per cent variable cost recovery model, if every user were to be charged $0.99 per cubic metre of consumption, a typical residential home with a 5/8-inch or 3/4-inch fixture would still expect to pay $30.40 in fixed fees per month for the water portion of their bill. As the connection size increases, so too would the fixed rates, but significantly so.
When using the same equivalent factors as Greater Sudbury, a one-inch connection, for example, would pay $79 each month in fixed fees, while a six-inch connection would be paying $1,575, with all other connections falling between that range.
Because of the emphasis on fixture size, the committee feels it is pertinent for city staff to develop a bylaw, policy and process for those users who have a large fixture and want to apply for downsizing.
David Euler, the city’s managing director of Engineering, Environmental and Works, said the bulk of those requests will come from industrial and commercial users that have moved into a building that has been repurposed throughout the years.
“If they feel they have a meter that is a size too large for their necessary consumption, there’s going to be a process where they can apply to have the city engineer consider it and there will be an opportunity for them to reduce the size of their meter,” Maroosis explained.
The issue of phasing the rate structure in was also a major emphasis of the group on Monday.
Right now, the residential sector is paying 73 per cent of the cost-recovery revenue required for the city’s water and sanitary sewer budget, but only accounting for 51 per cent of the water usage, while the ICI/multi-residential sectors use the other 49 per cent, but are only paying 27 per cent of the revenue.
The model that council adopted effective September 1 calls for the gradual tapering of fixed-to-variable billing ratio over a four-year period. The fixed-to-variable structure would remain 60-40 for 2016, but then slowly level out to 50-50 and 40-60 in the subsequent years.
Even then though, the closest staff could expect to get to true equality in their hypothetical models would be in 2019, when the residential sector would account for 57 per cent of the revenue under a 30 per cent fixed, 70 per cent variable cost recovery model.
While that idea sounds great for those who want to have greater control over their bills, the true impact of paying a higher dollar figure per cubic metre is more eye-opening than the committee first thought.
On the most basic level, as the monthly fixed portion of the bill falls, the variable cost per unit increases significantly, making one’s bill very volatile.
“I think one of the things that’s become very evident tonight is that as you move from 60-40, 50-50, and then to 40-60, you’re going to subject larger water users, including families and commercial and industrial users, to pay a lot more,” said Maroosis.
“It seems to me that we need to seriously considering recommending to council that we start at 60-40, but that council very carefully consider where they are going because I think it could be dangerous,” he added.
What’s more, city staff’s financial models are calculated on the assumption that the average household will consume 14 cubic metres per month. However, actual historic data shows that the average consumption in the area is just under 20 cubic metres per month, before taking any conservation assumptions.
Another potential problem with that rapid phase-in change is if the residential sector starts to pull closer to equality, the smaller pool of industrial, commercial and users with larger hook ups will be bearing the burden of some $2 million in unaccounted revenue over those four years.
With that in mind, the committee said it would be crucial for council to reevaluate the rate structure on a yearly basis according to actual data and consumer trends, while also moulding their decisions around the annual budget deliberations.
Despite the conundrum, Mayor Al McDonald said when looking at an average household using 20 cubic metres of water per month, Callander customers would be paying up to $22 more than a customer in North Bay, and that discrepancy would only increase with higher consumption.
Also added to the committee’s mandate upon council’s approval is investigating plans to develop and implement conservation and subsidy programs beginning as early as 2016.
Maroosis also tasked city staff with looking into the procedure and policy for dealing with frozen pipes and brown water flushing.
Their new deadline for a final recommendation to council is set for Monday, October 5, and Maroosis said he intends on finalizing that outline by the end of their next meeting, which is scheduled for next Monday, September 21.
