London resident describes proposed eight percent water rate increase as 'sticker shock'
London Community News
By Craig Gilbert/London Community News/Twitter: @CraigbGilbert
London residents are a big step closer to a healthy hike on their water bill next year.
The city's Strategic Priority and Policy Committee voted on Monday (Nov. 19) to recommend to council a water rate hike of eight percent and wastewater hike of seven percent, effective New Year’s Day.
If the changes are approved by council, an average homeowner using 188.1 cubic metres of water per year can expect their bill to increase by $25 in 2013 to $336 or 92 cents per day.
The bylaws making the changes official will be introduced at Tuesday’s council meeting (Nov. 20). Nothing is set in stone quite yet.
The hikes are part of the city’s strategy to close its $450-million infrastructure gap and make the water and wastewater segments of the municipal budget self-sustaining by 2018. The idea is to increase the rate by approximately six to eight percent in each of the next four years and dial down to three percent increases in each rate in 2018 and every year after — short-term pain for long-term gain.
According to the draft 2013 wastewater budget and forecast, servicing debt in that envelope alone will cost London taxpayers $13.3 million, $100,000 more than in 2012. That figure gave Ward 6 Councillor Nancy Branscombe pause.
“The less we spend on debt, the more we can give back to the taxpayer,” she said.
Capital funding, meanwhile, would increase by $1.5 million to $29.8 million. Top city engineer John Braam wrote in the draft wastewater budget that there is no new debt for wastewater infrastructure work anticipated after 2014 and that debt payments would peak in 2016.
“This further supports the position that wastewater and treatment is nearing financial sustainability,” he wrote. “The wastewater and treatment area continues to utilize and build its reserves in accordance with the 20-year Sewer System Plan.”
Also in the discussion was the new Value of Water funding model (or rate structure review). On the table is a change from the current one percent fixed, 99 percent variable rate structure to a 30 percent fixed structure. If it flows through the review process unchanged, it will go into effect March 1, 2013.
Councillors noted that the water rates have seen increases in the range of 10 per cent for the past decade (excluding the 2011 rate freeze). Gary Brown, the only member of the public to ask a question once the floor was opened to the sparsely populated gallery, described the eight percent proposed increase for water in 2013 as “sticker shock.”
Braam, in response to Brown and questions from councillors, said the city could achieve sustainability in water infrastructure tomorrow if they were to increase the water rate by 20 percent. But this is the real world.
“Cost increases have to be tolerable to our consumers,” he said. “Going over those thresholds (of around eight percent) seem not to do that … (The city) went with a rapid approach in terms of sustainable numbers. It would simply be too much to ask a business to change by 20 percent in one year.”
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