GORE BAY – At a Gore Bay special council meeting held last week, council passed a bylaw to adopt its water and sewer rates for this year, that will see rates increased seven percent.
“The seven percent increase in the rates is based on a study that we had done, that we have had to wait a while for,” Gore Bay Mayor Dan Osborne told the Recorder. “The study indicated that we were not charging enough for water and sewer, and it was recommended that we needed to raise the rates by seven percent for a few years.” He pointed out however, the rates could decrease if additional water users are added in the town (with future housing development, for example).
Council had considered the report, Water Financial Plan 2020-2028 prepared by Infrastructure Solutions, and distributed April 3.
“We’ve been waiting for this report for years,” Mayor Osborne told council. He pointed out town CAO Annette Clarke, “has said for years that we needed to look at the rates. And it has been recommended in this report that the rates be increased this year, and to 2028, by seven percent (each year).”
“In the study there was a comparison done with other municipalities, on and off the island, and our rates are low in comparison,” said Mayor Osborne. He pointed out, “an increase of seven percent seems like a lot, but it works out to be about $50.”
Larger companies who are water users in town will have higher increases than residential rates, council was told.
“Infrastructure Solutions was retained by the Town of Gore Bay to prepare a water financial plan for the communal water system. The plan was developed and prepared with a forward-looking approach at the financial position of the Town’s water system. The water financial plan fulfills one of the five submission requirements for the purposes of obtaining a municipal drinking water licence as per the Safe Drinking Water Act 2002.
“The prescribed reporting requirements for a financial plan are defined by Ontario Regulation 453/07. In general, a financial plan requires an in-depth analysis of capital and operating needs, a review of current and future demand versus supply, and consideration of available funding sources.
“The Financial Plan under O.Reg. 453/07 is required to cover a period of at least six years, and this plan’s period is from 2020 to 2028 inclusive,” the report explains.
“Under O.Reg. 188/07, the Town is required to renew its Drinking Water System Licence (Licence No. 258-101. The licencing process dictates the preparation of a water system financial plan in accordance with O.Reg. 453/07, and submission to the Ministry of the Environment, Conservation and Parks (MOECP) within six months of receiving the licence.
“The Town has undertaken this water financial plan in order to ensure that sufficient funds will be in place to cover the short-term water system operating costs and full water system life-cycle asset renewal and replacement costs over a nine-year period.”
The intent of the project is to develop a sustainable financing plan that will fully meet the current financial needs, as well as make full provision for renewing all water system financial assets. The cost of renewing financial assets has been identified for the 2020 to 2028 period. For each year, from 2020-2028, user fees have been set such that funds will be available when needed to meet future projected capital renewal and replacement needs.
It is explained in the report, “the projected user fee revenues for 2020 to 2028 are shown. The rates were increased by approximately three percent in 2019. The rates for 2020 to 2028 were developed by applying a seven percent increase each year over the previous year’s rates. These projected rate increases were established as part of the 50-year 2019 water rate study to meet all operating and capital renewal requirements.”
“The projected water/sewer bills for Gore Bay are compared with bills for a number of communities in the vicinity, and to water systems further away,” the report continues. “The data show that Gore Bay’s rates are among the least expensive in the table. Many communities that have less expensive water now may have to make major investments in new capital soon, which will drive rate increases to build the necessary reserves to manage future capital expenditures.
For Gore Bay in 2019 the utility (residential) rates for water are $469 and wastewater $375; for the Municipality of Central Manitoulin in 2018 these rates were $865.32 and $694.68; Town of Markstay-Warren (2019) $800 and $380; Municipality of Greenstone (2019) $888.56 and $817.48; Kincardine (2019) $389.88 and $414.60; Village of Hilton Beach (2019) $540 and $636.; Rainy River (2018) $876.60 and $246.60; and Town of Cochrane (2017) $760.80 and $578.16.
“Our recommendations are as follows: the town approves the water financial plan to provide a self-sustainable water infrastructure consistent with O.Reg. 453/07 and SWSSA,” the Infrastructure Solutions report notes. “The town continues to review the water rate bylaw every five years as per the provincial requirements; the town promotes consumption and efficient water usage which reduces operating cost and capital investment needs over time; the town embraces its 2019 water/wastewater study to set water and sewer rates.”
The report adds, “a water financial plan does not effectively determine major capital expenditures and reserve requirements outside the nine-year window of the plan. The rate study examines all major water components over a 50-year time frame to determine further rates taking into consideration factors such as estimated useful life, asset replacement requirements, conservation, equity and so on. These factors significantly impact full cost recovery and allow for sustainable long-term water infrastructure management.”
