Merrickville-Wolford council has approved a 5% increase in water rates for the Village in 2021. In 2016, the former council adopted the Water and Wastewater Financial Plan 2016-2021, which adopted a 10% increase in water rates every year until the municipality was able to get to full cost recovery of water and wastewater costs, on a user pay basis.
CAO Doug Robertson confirmed that the water treatment facility is now at full cost recovery, meaning that user fees are paying the costs of operating the system. Even so, staff recommended a 7.5% increase in water/wastewater rates this year to help build up reserves. At present, the reserves sit at only $164,794, which means they cannot afford to undertake any water/wastewater capital infrastructure projects, even if infrastructure grants are made available by upper levels of government. The staff report noted that the underground infrastructure is increasing in age, as many of the Village’s sanitary and water pipes were installed in the 1950’s-1970’s.
“Given the costs of capital work, just on underground infrastructure alone, the amount of reserves should be between $750,000-$1,000,000,” the report states.
The sewage treatment plant is also close to capacity, and the Village will have to have some funds set aside to apply for any grants available for upgrades and repairs. This is important, as there continues to be more and more interest in development in the Village that would need to hook up to the water/wastewater system.
Mayor Struthers noted that, while there was sound reasoning behind the 7.5% increase, this has been a difficult year for many Merrickville-Wolford residents. “Yes, it’s important to build reserves. Yes, it’s important to pay down debt. But it’s also important not to increase taxes or, in this case, rates for water/sewer,” he said at the meeting.
Councillor Bob Foster suggested that they lower the increase to 5%, which would allow them to put away some reserves while still giving Merrickville ratepayers a break. “It’s hard to say you’re offering your residents relief when you’re tagging them with a 5% increase, but it’s better than the 10% that was proposed previously,” he said. The staff report also indicated that the municipality’s net debt indicator has dropped from moderate to low, so Councillor Foster suggested that, should they need funds to help with a potential grant, they could borrow. Treasurer Kirsten Rahm confirmed that this may be a possibility, but it would depend on the terms of the grant application.
Councillor Cameron agreed with Councillor Foster that a 5% increase would benefit the municipal reserves, as well as residents. “It’s a minimal drop, and it could be a substantial savings for some residents in our community,” he said.
The 5% increase that was approved by council means that residential rates will increase by $6.96 a month, and the commercial rate by $10.68 a month. It will allow the municipality to put an additional $125,000 into waster/wastewater reserves in 2021, for a balance of $289,794.