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Stormwater flat rates should reflect property attributes: resident

October 31, 2024   ·   0 Comments

By JAMES MATTHEWS

Orangeville has invested significantly in each property’s water and wastewater systems.

Nancy Neale of Watson and Associates Economists Ltd. presented Orangeville’s water, wastewater, and stormwater rate study during council’s meeting on Oct. 28. The recommended rates and rate structure will be presented for council adoption on Nov. 18.

Consultants looked at the current and future capital expenditures for water, wastewater, and stormwater that are projected to be needed over the next decade. The consultants also identified capital cost options and have provided a 10-year estimate for operating costs.

“Right now you don’t do a 10-year operating forecast but we have worked with staff to project out a 10-year forecast for operating as well, with impacts from the capital related program as well as those day to day operating expenditures that will be needed over the longer term,” Neale said.

She said water and wastewater, already a rate-based system, has a base charge that has to be met by customers.

“That is charged regardless of how much water or wastewater you actually use,” Neale said. “So it’s guaranteed income.”

There is also an increasing volume rate structure. Residential customers shell out $2.13 per cubic metre for the first 20cbms of water used. They pay $1.90cbm for wastewater.

Residents pony up $2.88cbm for additional water over that monthly usage allowance and $2.57cbm for wastewater.

Non-residential customers pay a higher rate after certain volumes, Neale said.

“But the amount of the volume included in the first block rate really depends on the size of your meter,” she said.

Some customers remain unmetered and they’re charged an annual flat rate of $642.12.

“There is also some unmetered customers that are refusing to have a meter installed,” Neale said. “Those customers are being charged a higher amount.”

That amount is a little more than $1,280 per year.

As part of the study’s forecasts, the consultants had those uncompliant water and wastewater customers on the system. They’re calculated as paying the base rates as opposed to the unmetered rates.

The town recently completed a growth and development charges study. Neale said the new residential homes were also factored into the water and wastewater rates forecast.

“As new homes are built and they start using the water and wastewater system, they will start generating revenue from that monthly base charge as well as their volume rates,” she said.

There are means by which the consultants remained conservative to give wiggle room with the projected forecasts. The anticipated new residential builds were calculated as only generating half of a year’s water and wastewater revenue. That’s to give leeway for any months they weren’t built. Also, non-residential users weren’t included in the forecasts.

“It’s very difficult knowing the size of a building, whether they will be a very large water user or a very small water user,” she said.

Consider an industrial warehouse, she said. That warehouse has a large footprint in the town but doesn’t necessarily use a lot of water. A smaller business will use quite a bit more of the services.

“It’s harder to judge,” she said. “As you get new non-residential customers on, it should help to generate a little bit of a surplus that could then be used to mitigate where costs may be budgeted and come in over budget or help towards additional asset replacement in future years through reserve fund transfers.”

Looking at historic volumes, residential customers have used an average of 180cbms a year.

Neale acknowledged that many newer homes have more conservation measures because of things like low-flush toilets and energy-efficient appliances. Those homes use about 145cbms a year.

“We have assumed going forward those new residential customers will go into the first block rate,” she said. “If some of them do use more, they may generate more on that second block rate going forward.”

She said a conservative approach was taken with revenue assumptions. If they assumed too much, then that could leave the municipality with a deficit situation.

“What it looks like in total from 2024-34 as a total capital program for water, it’s just under $130 million that is required to be spent,” Neale said. “On the wastewater side of things it is just over $53.1 million.”

The replacement value of the water system is about $268 million and the wastewater system replacement rings in at $263 million, she said.

“We do a calculation to say if you were building into your rates about $15.5 million annually, then you will be putting money aside to actually be able to react and replace those future assets as they come due in the forecast as well,” she said. “Right now we’re not suggesting $15.8 million of transfers to reserves.”

There are outstanding capital debt payments that are being made. As those are paid off, the payments built into the budget will be a source of revenue for future capital debt charges or transferred into reserves for future asset replacement.

“What’s important for your residents and businesses to understand is the town has invested right now almost $27,000 per property in water assets and another $26,500 in wastewater assets,” she said. “So it’s significant for every property – the amount that you have invested in these system.”

Orangeville resident Matthew Smith said he understands the need for a wastewater fee. But having a flat rate per year or a flat rate based on property size isn’t fair compared to the rates for water and wastewater which are based on consumption.

“In the case of the stormwater, if you’re just being charged because of a large property, you might not have as much runoff as a small property that’s an almost 100 per cent permeable surface,” he said. “I think that should be taken into consideration.”

He has downspouts on his property directed toward gardening efforts and the lawn.

“I try my best to minimize stormwater runoff because I understand how important it is,” Smith said. “So I think something like that should be taken into consideration.”

Mayor Lisa Post said the town has to consider some of the administrative costs to bring Smith’s suggestions to fruition. Those costs can be prohibitive, she said.

Councillor Joe Andrews wondered if there are means to incorporate climate change concerns, particularly regarding stormwater system best practices.

He said parts of Orangeville have been affected differently by heavy rainfall.

David Smith, Orangeville’s CAO, said the town has invested about $16,000 per property in the stormwater management system.

“As part of our budget process you will see some requests for additional resources to make sure it’s as efficient as possible,” Smith said. “It is our first line of defense, making sure the stormwater system is well maintained.”

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