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Public invited to discussion on water rates for next five years

Rates for water and wastewater in Prince Edward County – some of the highest in the area – are being discussed for ultimate development of a five-year plan.

A virtual town hall presentation is being held tonight, led by Amanda Carter, Director of Finance, Don Caza, Director of Water and Wastewater Services and Peter Moyer, Director Development Services. The public has been invited to comment on the municipality’s Have Your Say page (seven responses posted to date), at tonight’s meeting, and at various in-person locations coming up this month. The meeting can be watched live, or the recording after the fact, on the County’s YouTube channel PEC Council.

Water and wastewater rates are approved by council every five years based on recommendations from staff and specialized consultants and are part of the County’s obligation to prepare a water financial plan under the Safe Drinking Water Act.

A study by Watson & Associates Economists Ltd was presented to an August Committee of the Whole meeting as direction as the current rates are set to expire Dec. 31, 2021.

The study informs council’s decision making about rates to support the water and wastewater infrastructure and ongoing operational costs. A final decision is to be made this fall, before the capital budget is set for 2022.

Council directed staff to undertake public consultation on four water rate scenarios with a view to determining:

– Do we pay more for water in the short term, or take on debt in favour of a slower rate increase?
– How quickly should we try to achieve “full lifecycle funding” of our utility through water rates?
– Should rates increase across the board or be tied to certain types of water usage?

The four scenarios:

1. Full funding of the water and wastewater by 2023 (maning rates are sufficient to support projected capital needs). Means rates increase year-round.
1a. Full funding by 2030 with seasonal rates (April to September) more than current rates for summer consumption and less than current rates for non-summer consumption

2 – Full funding by 2034 – rates increase year round
2a – Full funding by 2034 with seasonal rates


Prince Edward County is second to Leeds and the Thousand Islands for annual water and wastewater bills, according to a survey of typical residential customers consuming 112m3 annually with a three-quarter inch meter.

Three of the major factors that influence rates are reflected in the study. They include the long-term capital plan for what is required over the next 10 years; long-term operating costs and growth calculations for water and wastewater utility users in the next five years .

The cost to maintain the underground infrastructure at the seven plants across the County is the most significant contributor to water rates.

Through recently-approved area specific development charges and other tools, the County focus is to ensure “growth pays for growth” as development charges fund increased needs for infrastructure while an increase in utility users spreads operating costs across more households, and businesses.

“The municipality currently has very low reserve and reserve funds for water and wastewater that could be used to finance capital costs. As a result, the municipality will have to debt finance all capital works for water and wastewater services,” said Amanda Carter, director of finance, in her report to Committee of the Whole meeting. “This debt servicing ultimately impacts the operating budget and thus impacts rates.”

However, she notes two studies will inform the longer-term water and wastewater rates beyond the current five-year study, “and to ensure growth pays for growth”. The first is a regional Wellington water treatment plant environmental assessment now in the request for proposals stage. The second is the proposed Master Servicing Plan for Picton, providing a timeline for when capital works will need to be done over the longer term. It is to be put forward in the 2022 capital budget for consideration.

The Watson’s capital funding plan for 2022-2024 shows:
• $1.2 million in rate-based debt
• $55.5 million in growth-related debt (D.C. and Connection Charge
funded)
• $20.3 million in unfinanced rate-based debt from prior expenditures
• Debt financing assumed at 4% interest rate and 30-year term
• Current Annual Repayment Limit (ARL) at 6%, will increase to a
peak of 17% by 2025, declining to 14% by 2030

It offers two capital funding scenarios: achieving full lifecycle funding level by 2030; or by 2034 maintaining prior rate study projections.

The operating budget forecast is based on the 2021 budget, plus inflation at two per cent annually; adjustments for new Wellington infrastructure ad capital-related expenditures such as debt servicing and reserve fund contributions.

 

 

 

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  1. kb says:

    Thank you ayar, SM and Dennis for clarifying. Put into lay terms makes it easier to understand how the issue and cost got to this point.

  2. Dennis Fox says:

    What needs to be remembered is the history of the water treatment plant – it explains much. The council of the day held public consultation meetings (which was the right thing to do) – however, what they didn’t realize at the time was that this issue would drag on for many years. At the start of this process, the municipality requested from both the provincial and federal governments 1/3 cost sharing – which again was the right thing to do. The original cost of the water plant was “around” (I forget the exact amount, but this is close) $15Million – the province and the feds each gave 1/3. By the time the final decision was made ( years later), the cost had grown to over $30Million – making the donation from the feds and province inadequate – but whose fault was that? Since the original Council decision was to have it paid for by the water users, this additional cost was passed onto the users in the urban areas – which is also the right thing, but no doubt expensive. Perhaps the time has come for Council to renegotiate the repayment schedule and to lessen the burden on the water users??

    Some feel that the creation of a “Water Commission” would help solve this problem. IT WON”T – it will become just another layer of government bureaucracy for taxpayers to pay for and it can’t change the fact that we paid more than it should have cost and it still has to be paid for.

  3. SM says:

    The “new waste water treatment plant” that kb speaks of serves Picton. The cost of that plant forms part of the bill for all of the County waste water users. Water is supplied to more than Picton as well. Peats Point has an expensive per capita system. Rossmore gets water from Belleville at a ‘high’ cost. Consecon gets water from Quinte West. Wellington gets water from Lake Ontario. As we are aware, Wellington may be getting a very expensive upgrade to the water and waste water system. All urban water users pay the same water supply rate even if the cost to provide that water to that specific area is higher than other areas. Waste water users pay at the same rate, meaning that Wellington users help pay for Picton users. All of this because the County is one municipality and all users fund the municipal system.

  4. ayar says:

    Have to ask why we have 7 water treatment facilities. Peat’s Point cost over $250,000 a year to maintain for less than 30 houses? Give each household $10,000 to drill a well and The County would be ahead after a year with no future costs.

  5. kb says:

    I may be mistaken but I recall when the new waste water treatment plant was built (on top of a hill where matter is pumped up and down), and due to it’s size and ability it would be able to accommodate the anticipated growth in population and newly developed neighborhoods. It’s still not clear why the rates continue to inflate as high as they do. It’s important that residents have a say in the proposed scenarios, however I don’t feel there’s an adequate explanation as to WHY the rates are obtrusively high. And WHY on earth is that facility costing so much? Prior rates studies, assessments, connections, capital funding plans don’t mean anything to lay folks like me – can you simplify this? How did we get to this?

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