LAC LA BICHE - They were quick to say the discussion just them splashing around the idea of water and sewer service rate revisions, — and they certainly don't want it to boil over as a hot water issue anytime soon. But for an hour last last Tuesday, Lac La Biche County councillors were wading through statistics, comparisons and opinions on the effects of significant rate changes for residential, commercial and industrial water and sewer services.
Municipal administrators say any increases to the current rate system are long overdue.
"We haven't really changed the water rates and sewer rates significantly ... since amalgamation," said Lac La Biche assistant CAO Dan Small.
In the 12 years since the Town of Lac La Biche and Lakeland County amalgamated to eventually form the current specialized municipality of Lac La Biche County, there have been many significant expenditures and upgrades to the system, including the construction of the Hervey Marchildon Water Treatment Plant, the creation of the bio-nutrient waste treatment plant and utility service lines to Lakeview Estates and the Mission area.
Comparing the local rate sheet to neighbouring municipalities, as well as looking at scenarios to recover costs, plus the need to consider replacement costs on much of the aging infrastructure in place, the municipality's finance manager says the comprehensive review shows some glaring numbers.
"We have a lot of catch up to do," Zeeshan Hasan told council last week, not watering down the challenges of maintaining the services within the 120 kilometres of water lines and 126 kilometres of sewer lines that currently service about 700 residential customers as well as another 400 users at commercial bulk stations.
Increases over time
Presenting a report that projects potential rates for a 100 per cent hard-cost recovery, Hasan said existing rates would have to almost triple to reduce the estimated $2.6 million annual deficit from the utility.
In 2019, revenues brought in from the water utility were around a million dollars, but expenses to provide the water were upwards of $2.6 million. The sewer utility revenues for 2019 were set at around $500,000, with expenses of around $3 million. The disparity between costs and income for the municipality were broken down into cubic metres of delivered water and transported wastes. The report shows the total current cost for a cubic metre of potable water to be produced and distributed, including a small surcharge for capital costs, is around $4.20. The rate paid by a residential customer, however, is only one dollar per cubic metre delivered. Similar discrepancies are highlighted in the report for the truckfill locations.
"Right now our rates are so cheap that if you leave your tap open for a week, you wouldn't notice a big dent in your bill — maybe that's an exaggeration, but our rates don't consider that at this point and they need to consider that," Hasan said, generalizing the current rate plan, but putting it into perspective.
Lakeland comparison
Comparing the current Lac La Biche County rates to other municipalities, the report shows a considerable variance, with the local customer rates far lower than all other comparisons. Local water and sewer rates include a flat fee of $5.50 for each service on a residential monthly invoice, plus the one dollar per cubic metre charge. According to the report, the average household in the community uses about 13 cubic metres of water monthly, and disperses about the same amount of wastewater. The average residential utility bill for water and sewer services in Lac La Biche County is around $60 per month. In the neighbouring County of St. Paul, the base charge prior to the cubic metre costs is already set at $60, and then the cubic metre rate is $1.60. The average monthly utility bill for water and sewer to a County of St. Paul ratepayer sits at about $140. The Town of St. Paul sets a $45 base fee before its $1.60 cubic rate, bringing in a monthly invoice of around $105, and the County of Athabasca has a $50 base charge on top of a $3.37 per cubic metre charge.
In order to bring the local rates to full cost recovery, and closer to neighbouring municipal rates, the report suggests moving the cubic metre rate from a dollar to $2.71 for water and up to $3.90 for sewer services. If done all at once, that kind of rate increase would take the average Lac La Biche County household's water and sewer utility rate from $60 to $175 per month. The report suggests a three-year transition, increasing residential rates annually by 57 cents per cubic metre used each year.
Municipal councillors see the need to hike the rates.
"We are paying way less than all the other communities around us," says Owl River-area councillor Sterling Johnson. "We have to change that and we have to increase our rates."
Others on council agree — but want to make up the difference over several years, and want to have more discussions on what kind of cost recovery is needed.
"I'm all for us right-sizing what we are paying for utilities across the board," said councillor Lorin Tkachuk, " and us looking at doing small incremental increases is great ... but if we are looking at more than doubling the rates in the next three years .. I have a problem with that."
Percentage of recovery
Tkachuk and others on council say the report's attempt to get 100 per cent cost recovery for the service is not something he can support.
"I could never support us going to 100 per cent cost recovery," he said, explaining that the higher utility rates could deter businesses or possible new residents from moving to the community. "We are going to be pushing people away versus wanting to bring people into the county"
Councillor Colin Cote agrees with subsidizing some of the costs for the utility service.
"We have to bring our rates up to something that's a bit more current ... however. ... We do have a lot of industrial taxes that I believe should be used for the benefit of our residents — so I don't mind subsidizing water and sewer. That's one of the benefits of living in our county," he said, adding that he is in favour of implementing a small increase to the rates — about 15 percent — immediately, since it has been 12 years in the making. "I don't want to kick the can down the road any further. I think we should start."
Councillor Darlene Beniuk said the rates need to increase — it's just an expected part of life, she said — a long overdue part.
"It's been the same rates for 12 years. Go back and buy a loaf of bread 12 years ago compared to today. The costs have escalated," she said, explaining the math in a breakdown over a three-year increase as just $5.70 extra per month for residential users. "That's 72 dollars a year, less some change — that doesn't sound like a pretty big jump to me when you do it that way."
For some residents, it will be a big jump, countered Tkachuk.
"Any type of rate increase right now.... even if it is that five dollars per month, there might be some people that aren't going to be able to afford that five dollars a month ... because they can't afford their bills as is," he said.
Further debate
While some on council expressed an interest to implement changes in the very near future, Lac La Biche County Omer Moghrabi also tried to hold back any immediate changes — especially when many residents are figuratively struggling to keep their has above water financially.
"I do belive we have to look at this and we have to look at it closely, but I'm not willing to do something immediate. We have been in a five year economic slump, we are in the middle of a pandemic. People are at home — a lot of them are not working. I certainly don't want to spring something on them on January 1, 2021," said the mayor.
With questions remaining about what percentage of cost recovery is needed and timelines for implementing any part of the plan, council tabled the discussions to a date later into February of the new year for further review. Council also noted there would be time within the review for public consultations on the issue.
