Proposed 2.1% water rates ‘transitional’ increase for 2027

By Sharon Harrison
The Water and Wastewater Rates Committee is proposinga one-year interim water and wastewater rate increase for 2027 to replace the 2022–2026 rate structure that expires at the end of this year.

The proposal includes a 2.1 per cent inflationary increase, based on the 2025 Consumer Price Index, to be applied to both fixed (base) and volumetric (consumption) rates. However, no changes are proposed to fees, charges or existing rules and regulations, currently.

Arryn McNichol, Director of Finance and IT describes the increase as a “modest, inflation-based increase” and one that is adjusted in line with inflation only, in what he called a “transition year” for 2027. He said the adjustment, a one-year interim rates solution, helps offset inflationary operating pressures during the interim period.

“That will roughly match what we believe inflation will be for 2027, but who knows, it could be eight per cent given the volatile environment. We just tried to be conservative and balanced in lieu of the big five-year rate to review next year.”

The impact of the proposed increase on a typical residential customer is “modest”, McNichol outlined.

For example, the monthly base charge for a standard residential connection (3/4-inch meter) would increase by approximately $0.99 for water services and $1.03 for sewer services, for a total monthly increase of $2.02, along with minor corresponding adjustments to consumption-based charges.

In his report, McNichol said the one-year approach (rather than the usual five-year rate structure) will allow the municipality to maintain financial stability while completing on-going work related to growth, infrastructure condition and long-term servicing strategies.

A comprehensive Water and Wastewater Rate Study and Development Charges Background Study is planned for 2027, at which time a new multi-year rate structure will be brought forward for council consideration.

The committee will bring forward the proposed 2027 one-year interim rate recommendation for council consideration and adoption at a future council meeting.

At that time, the committee will also recommend that staff undertake the rate studies in 2027, following council direction on growth projections and long-term water servicing infrastructure.

“From my perspective, given the amount of uncertainty surrounding growth projections, infrastructure conditions, long-term servicing strategy, I think a one-year interim approach is reasonable,” said committee chair councillor Corey Engelsdorfer. “I think it would be irresponsible to lock residents into anything other than that.”

Over the 2022–2026 period, water and wastewater rates increased at varying levels under the current bylaw, explained McNichol.

“Water base charges increased more significantly over that period, while wastewater rates experienced more modest increases, generally closer to inflation,” he shared. “The recommended 2027 increase represents an interim inflationary adjustment only and should not be interpreted as indicative of future rate requirements, which will be informed through the future Water and Wastewater Rate Study.”

Staff had originally anticipated undertaking the studies update to inform a new multi-year rate structure when the current structure concludes at the end of 2026.

“At the same time, the County is advancing key initiatives that are key to long-term water and wastewater financial planning, including growth projections, engineering condition assessments of water and wastewater infrastructure, evaluation of long-term water servicing strategies, and continued asset management plan lifecycle modelling.“

McNichol also notes that the municipality is required under the Safe Drinking Water Act to update and obtain council approval of a Drinking Water Financial Plan prior to July 1, 2026.

“While the legislative submission deadline is July 11, staff require sufficient time in advance of that date to complete internal review, finalize documentation, and prepare the financial plan for submission,” he said.

“Given the timing and interdependence of these initiatives, staff are recommending a one-year interim Water and Wastewater Rates bylaw for 2027 to allow sufficient time for council to consider the results of this work prior to establishing a new multi-year rate structure.”

Staff did consider two other options (in addition to the one they are proposing to council), but neither are being recommended by staff.

Option 1 would be to maintain 2026 rates with no increase for 2027.

“The implications of this approach would be: It does not reflect inflationary pressures on operating and maintenance costs; it may reduce the County’s ability to maintain current service levels and fund lifecycle requirements; and it may result in the need for a larger rate increase following the 2027 rate study.”

Option 2 would apply a higher rate increase based on construction-related indices, such as the non-residential building construction price index, which more closely reflects capital and infrastructure cost pressures, noted McNichol.

“The implications of this approach would be: It would result in a higher rate increase than CPI, particularly given recent construction cost escalation; it more closely aligns with long-term capital and asset replacement costs; it may not be appropriate in the absence of a comprehensive rate study and updated infrastructure planning inputs; it could create affordability concerns and may not align with the intended transitional nature of the 2027 bylaw.”