Jess McDiarmid
Northern News Services
Published Friday, November 30, 2007
YELLOWKNIFE - Ratepayers may see their water bills hiked by as much as 18 per cent over the next three years as the city tries to drag its beleaguered water and sewer fund out of the red.
The roughly $5.4-million fund, which covers water and sewage services for Yellowknifers, has had a growing deficit since 2001.
"If we don't do anything... we get in a worse and worse position," Director of Public Works Greg Kehoe told councillors during a policies, priorities and budget meeting Nov. 26.
While revenues have only gone up by 9.8 per cent since 1995 - the last time rates increased - costs have grown considerably more.
Salary costs have gone up 47 per cent and contracted costs have risen more than 60 per cent. Construction costs on the city's water and sewer projects have increased 10 per cent each year since 2001 and revenues actually decreased in the past two years as people used less water.
Council already approved a 3.5 per cent increase to water rates in June that will come into effect January 2008.
The 2008 draft budget, released earlier this month, recommends the infrastructure replacement levy on their water bills go from $5 to $7, effective June 2008, and to $10 the following January.
It calls for five per cent hikes to water rates in 2009 and 2010.
An average household on piped water currently spends $91.69 a month on consumption and fixed rate charges. The proposed increases would see that cost rise nearly $17 by 2010.
For those relying on trucked water - services that have a $377,000 gap between revenues and expenditures - monthly rates would rise from the current average $77.78 to $93.05 over three years. Households that use trucked water typically consume a third less water than piped homes.
City administration also suggested tacking fees onto services such as water leak inspections and meter verification as future considerations for addressing the deficit.
"You could generate in the order of $100,000," said Kehoe. No additional fees, however, are in the draft.
The deficit has meant that the amount paid to capital projects from the fund has been lowered, increasing the infrastructure gap. Nearly 60 per cent - $40 million - of the $67.8-million infrastructure gap is water and sewer.
Cold weather means the system is more expensive to operate than many Southern counterparts, said Kehoe, as water has to be heated and twin water mains and other measures are required to prevent freezing.
The proposed increases would stabilize the fund by 2010 to 2012 if other factors remained constant but would not address the infrastructure gap.
"We're so far behind that this is a meaningful significant start," said Kehoe.
City councillor Kevin Kennedy asked longer-term members of council why the problem had been allowed to get worse for so long.
"It just seems like this is one of those things that if we had dealt with it in 1995 and increased it as a marginal amount that we wouldn't be in this boat right now," said Kennedy.
Coun. Bob Brooks, who is serving his fifth term as a city councillor, said public pressure not to raise taxes and fees goes in cycles.
"Some years, for example, in low growth or whatever, there's a lot more interest in trying to not put additional burden on the taxpayers. Sometimes we get a lot of pressure from the public on that, sometimes there's less, depending on the economy," said Brooks.
"And oftentimes when this is brought forward, that might be the case ... Some years people just can't afford any increases whatsoever."
