Water Charges to Increase

At last Monday’s Committee of the Whole Council meeting, Sean-Michael Stephen, manager at Watson and Associates Economists Ltd., presented his report containing recommendations for rates for water and waste water (that is “sewer”) for the next 5 years as well as a forecast to 2030.  Although there were questions from Councillors, the recommendations were approved and will be formally put in place at next Monday’s regular Council meeting.  Over the last 5 years, rates have increased by 5.3% per year and will increase by 5.9% per year over the next 5 years.  The increases are needed to fund the “long term capital needs of the systems by 2030, providing for the sustainable replacement of infrastructure and ongoing operation and maintenance of the systems.”

The presentation was long and difficult to follow but there were questions.  Councillor Brian Darling asked about  the possibility of reducing the base charge and compensate with an increased usage charge.  This would help people trying to save costs by conserving water.  In response Sean-Michael said that the base charge is intended to cover the fixed cost of supplying water regardless of whether the water is actually used.  However, the base charge does not fully cover fixed costs so in effect, the rates are balanced to somewhat help low usage users.

Suzanne Seguin - File photo
Suzanne Seguin – File photo

Deputy Mayor Susanne Séguin raised the issue where seniors (and others) water their garden and are also charged for this as waste water yet it is absorbed into the ground and does not enter the waste water system.  Susanne asked if this case had been considered.  The short answer was that it’s common practice across Ontario to charge this way – not really helpful.

Suzanne also asked whether the Capital plan covered sufficient waste water capacity for upcoming developments.  Are we in good shape?  I think that the response was that the rate study depends on the Development Charges background study which is being looked into.  That is, no definitive answer.

Rates planned – per month

    Water Sewer
Base Charge 2020 $13.75 $15.01
2021 $14.74 $15.70
Block 1 (up to 22.73 m3) per m3 2020 $1.37 $1.54
2021 $1.47 $1.61
Block 2 (up to 35 m3) per m3 2020 $1.71 $1.92
2021 $1.83 $2.01

If my personal usage is an indication, most users would be Block 1 only, even in summer with moderate watering of gardens.

According to the study, Cobourg’s current rates compare favourably with comparable municipalities.  For example the average bill for a residence in Cobourg in 2020 was $747 per year and for Port Hope $1800.

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MiriamM
11 January 2021 8:20 pm

This is what we should be worried about, the commodification of water.
https://www.cbc.ca/news/business/water-futures-price-1.5866538
This idea using water for profit, the provision of fresh potable water systems and services that are essential to human life and communities. Water for profit has led to the destruction of some places. Clean water is a human right, a foundation of the environment. I sometimes wonder what it would cost each of us if we were responsible for our own supply.

JimT
Reply to  MiriamM
11 January 2021 8:53 pm

I read in McLean’s Magazine years ago that Castro’s revolutionaries felt the same way when they came to power in the 50s. They declared that water would be free to all and not metered. As a result, everyone left their water trickling in order to have a cool supply at all times (it warmed up if left sitting in the pipes) and the water treatment plants were overwhelmed.
They then reinstituted water bills.
There’s nothing wrong with passing the costs of commodities on to the end user, essential or otherwise
.

Last edited 2 months ago by JimT
SW Buyer
Reply to  JimT
11 January 2021 9:40 pm

JimT & MiriamM:
Perhaps consider that the water is free.
The fee is to make it clean, safe and deliver it to the customer.

MiriamM
Reply to  JimT
11 January 2021 10:23 pm

Perhaps I was not clear. Paying a fair price for water is not the problem. Having it arranged as a market commodity where demand/supply can raise its price so that it becomes unaffordable as a staple need is a problem. And in reply to SW Buyer below, yes to making water safe for human consumption and for paying for delivery, but water should be clean as a basic bench mark. As a general global view, water is too often used to dilute or hide waste.

Just Wondering
Reply to  JimT
12 January 2021 7:22 am

Years ago in Southampton On water was not free but was not metered. The town discovered that cottagers were leaving their water dripping all winter to keep the pipes from freezing. Now it’s metered.

JimT
11 January 2021 9:09 am

“Sean-Michael said that the base charge is intended to cover the fixed cost
of supplying water regardless of whether the water is actually used.”  

By this logic, our local discount grocery store should be able to add a standard $5. to every grocery bill to cover “fixed costs” such as the cost of building the new store in the first place, regardless of how much you spend on groceries.

But imagine the wailing and gnashing of teeth if they did such a thing.

Conor
Reply to  JimT
11 January 2021 9:44 am

Water is life. We have to pay no matter where we live. We don’t want another Walkerton do we?

JimT
Reply to  Conor
11 January 2021 11:13 am

The Walkerton tragedy had nothing to do with the price of water. It was the result of negligence and laziness on the part of certain individuals paid to keep the water supply safe in Walkerton.

Ken Strauss
Reply to  JimT
11 January 2021 10:50 am

Imagine the wailing and gnashing of teeth if the local grocery store charged 3 times as much for a 2-litre carton of milk as for a 1-litre carton. That is exactly the case with your water and electricity bill yet everyone thinks that is OK.

From John’s table: Block 1 usage is $1.47/m3 yet Block 2 usage is $1.85/m3. A quantity penalty rather than a quantity discount!

Leweez
10 January 2021 2:31 pm

LUSI also runs the Cramahe(Colborne), and the Alnwick Haldimand(Grafton)
water systems but we do not hear whether the company is making a profit off of these systems. If they are making a profit off these systems, is this profit used to keep our water rates in Cobourg lower? If they are not profiting off of these systems, why are they running them instead of employees working on the Cobourg water system?

Gerinator
10 January 2021 1:46 pm

The Watson presentation says it all – “Objectives of the Rate Study are to understand the long-term operating and capital costs of providing water and wastewater services and to develop a sustainable funding plan and rate recommendations”. So the operating and capital projects ‘wish list’ gets articulated √; sustainable costs are determined √; rate recommendations, based on the ‘wish list’ are made √. No where is there a specific itemization of the operating and capital requirements (what specific entities are being funded). Also missing is what has this Utility done to reduce costs over the last 5 years; and / or planned reductions over the next 5 years. Further using a std inflation of 2% is galling as in we are in a virtual deflationary period, example the cost of money. Finally this is a consultants report and they will deliver to the clients needs – always. My take.

Kath
10 January 2021 11:58 am

I guess Council felt they owed one to Lakefront after they incorrectly refunded William St Beer for an obvious water leak. Council should be ashamed, in particular, DM Seguin for her ‘surprise’ resolution to incorrectly refund William St Beer.

Ken Strauss
Reply to  Kath
10 January 2021 12:30 pm

Owed one? Doesn’t that assume that Lakefront people personally benefit from their mistakes? Remember previous Council decisions such as spending millions of dollars to unnecessarily replace water meters and no consequences for the cost overruns to refurbish the water tower and…

Bryan
Reply to  Kath
10 January 2021 12:52 pm

Kath:
First point: Lakefront did not refund anything to WSBC. Waterworks did. Waterworks is the Town’s water supply department and is a “wholly owned” Town business unit. The Town owns all of the water system assets, liabilities, revenues and expenses. Lakefront (LUSI) is simply an out-sourced contractor that provides the staff to run the water system.

Second point: The refund to WSBC was totally justified and supported by Waterworks own data. There was no “obvious water leak” and LUSI staff never provided any evidence of a leak. WSBC hired a plumber to check their plumbing system and the plumber certified that there were no leaks or evidence of a leak. Kath, what evidence do you have that there was a leak that resulted in the huge overbillings to WSBC?

Third point: Council voted 7-0 (if memory serves) to approve the refund. As part of their due diligence, most, if not all of the Council members visited the WSBC site and thoroughly reviewed WSBC’s data and evidence. DM Seguin’s motion was certainly not a surprise to Council.

I suggest you review WSBC’s presentation to Council and pay close attention to the data exhibits.

I trust your apology to Council, DM Seguin and WSBC will be posted forthwith.

Last edited 3 months ago by Bryan
Sandpiper
10 January 2021 9:53 am

I like Cornbreads Idea New Brooms sweep clean Dead beats be gone !
Councilor Darling should have known and addressed this upcoming issue well in advance of spending another $2 Mill on water mtrs last yr . Just goes to show They have no idea as to what they are subjecting the residents too . Wait until you hear about the lack of sanitary sewer LINE capacity in this town we are not supposed to know

cornbread
10 January 2021 9:22 am

Perhaps the long term capital needs to 2030 should be shouldered in large part by new construction fees, building permits etc. Did the town look at this idea. Basics like water should not be increased for established customers by any more than the general cost of living or inflation rate.

Jones
10 January 2021 8:17 am

And of course landlords can raise rents accordingly
NOT

Deborah OConnor
Reply to  Jones
13 January 2021 7:05 pm

Landlords can get permission to raise rents above the set Guideline % when they bother to ask for it. There’s a form for that, here’s info from two sources.

https://tribunalsontario.ca/documents/ltb/Interpretation%20Guidelines/14%20-%20Applications%20for%20Rent%20Increases%20above%20the%20Guideline.html

https://www.cleo.on.ca/en/publications/rentincs/increases-above-guideline

Leweez
9 January 2021 2:46 pm

Why are we requiring a consulting company to set our water rates?
Don’t we contract this work to Lakefront Utilities already?
So we are paying our contractor to give our consultant the information to set our water rates?
Time to bring the water system back under the Town umbrella.

Art Seymour
Reply to  Leweez
10 January 2021 9:02 am

It doesn’t make sense to hire outside “experts” to recommend our rates since surely we do have well trained, experienced engineering, financial, and corporate management capabilities within our Town and Lakefront entities who could be assigned this task. There should be a “standing work-group” to be activated annually , as called by Council and/or the CAO to do this staff work. Why is it so often that Municipal Govt.s tend to call upon outside consultants to do that work for us?
Operating Costs are not difficult to ascertain by having an internal review of all operating aspects conducted, by internal staff lead by an experienced internal manager, or maybe even hiring a local retiree; this town is full of such.
As for the “capital” restoration and/or replacement planning , surely such base calculations are also not needing outside expertise. Time for our senior technical and management staff to take these functions on , even if they might need a little “direction”.

cornbread
Reply to  Art Seymour
10 January 2021 9:28 am

Perhaps Art, the new CAO should get rid of the deadbeats and hire new staff that can think on their feet and be responsible for their work, and end the practice of outside consultants and blaming them if something goes wrong .

Dubious
Reply to  Leweez
10 January 2021 3:17 pm

Setting rates requires competent staff and management. Does Lakefront have any?

Leweez
Reply to  Dubious
10 January 2021 3:31 pm

Well, they had the consultant set the rates so I guess not.

Liz Taylor
Reply to  Leweez
10 January 2021 10:44 pm

I began googling how towns, cities set their rates, they hire consultants, Port Hope, Toronto, Peterborough – Standardly they hire a consultant and act on their report. An arms length recommendation from a party that has no vested interest.

Last edited 2 months ago by Liz Taylor
Frenchy
Reply to  Liz Taylor
10 January 2021 11:05 pm

content deleted

Last edited 2 months ago by Frenchy
Ken Strauss
Reply to  Liz Taylor
11 January 2021 11:05 am

Standardly they hire a consultant and act on their report. An arms length recommendation from a party that has no vested interest.

Do you believe that consultants are not influenced by the desires of their employer?

Liz Taylor
Reply to  Ken Strauss
11 January 2021 12:29 pm

Ken – who do you suggest then to establish the rate? Lakefront Utilities as suggested by one who stand to profit? Or the Town as the other suggestion on this blog directly who stand to make money? Apparently outside consultants is the standard practice here and elsewhere. Your suggestion?

Ken Strauss
Reply to  Liz Taylor
11 January 2021 12:53 pm

Liz, why do you think that Lakefront Utilities stands to profit? They are just town employees structured so as to avoid revealing their salaries.

The problem with using consultants to determine revenue requirements is that we have to pay them to get the numbers from staff and then they massage the raw data into a pretty report. It would be far better to have staff prepare a report with all assumptions — life of assets, discount rates, reserves, demand growth, etc — clearly identified. There are many retirees in Cobourg who would error check the numbers without charge.

One point not discussed here is that the increase in base charge versus increases in usage charges is a political rather than a technical decision and should not be influenced by consultants. Councillor Darling raised this point yet it was not really considered by Council.

Liz Taylor
Reply to  Ken Strauss
11 January 2021 1:03 pm

Ken under that vein all businesses could save using retired seniors, people receiving benefits assigned to work for their benefits. No one left earning. Myself I like to be paid for the work I perform. Nothing in life is free – I was taught that lesson at an early age.
As all municipalities hold the formula of large volume use there must be a rhyme or reason for it. Perhaps as it is commercial use and they make money back from their product produced unlike the average citizen.
As for “massaged figures” basically you are stating they are not honest. As for asset life you may find it adds to the cost as replacement value would have to be factored in.

Ken Strauss
Reply to  Liz Taylor
11 January 2021 2:02 pm

As for “massaged figures” basically you are stating they are not honest.

It was not my intent to imply that they were dishonest. A better term would have been “beautifully presented”. I have not yet read the lengthy report so I have no opinion regarding “honesty”.

As all municipalities hold the formula of large volume use there must be a rhyme or reason for it. Perhaps as it is commercial use and they make money back from their product produced unlike the average citizen.

Perhaps but we have a large garden and sometimes have Block 2 usage. I make no money from the garden!

Liz Taylor
Reply to  Ken Strauss
11 January 2021 2:17 pm

Ken – you have stated an opinion. Changing to “beautifully presented” from “massaged figures”, reminds me of “a rose by any other name” – a rephrase to more “beautifully presented” on your part.

A large garden would certainly be a lovely thing but when you decided on one you knew the cost in maintaining one like anything people decide to do with their income. A better place to live vs travel, gas efficient vehicle over larger model, take out, steak or outside round?

Well Ken I have enjoyed our exchange – courteous exchange of views, I thank you. Great way to provide pros and cons, different aspects for either participants perhaps to think about on issues. I have learned much on this Blog about Cobourg and different considerations on town projects.

After a vote I don’t edit. I did want to say as perhaps I was not strong enough in making the distinction – water is supplied for citizens daily needs – washing, cleaning etc. Perhaps you should write to the Town and express your thoughts about higher volume water use for personal requirements.

Last edited 2 months ago by Liz Taylor