Subsidization of non-residential consumers by residential users would be reduced, but not eliminated, under a proposed water/wastewater rate structure under consideration by the municipality.
Dan Watson of Watson and Associates Economists stated at a public meeting on June 16 that both the consulting firm and Town of Minto staff were recommending a decreasing block structure be used, as opposed to a constant rate system, when metered water billing is implemented this summer.
Under the proposed system, an average residential customer currently paying $212.50 for water and wastewater service under the flat rate structure, would pay $214.45 in 2015. Under the constant rate system the same customer would pay $213.35.
By contrast, a low-consuming residential home would see a drop from $212.50 to about $150 under either option.
A medium consumption home would experience a jump from $212.50 to $224.33, under the block rate system.
High consuming residential properties, for example a 12-unit apartment building, would see their bill rise from $1,458 to about $1,503.
A medium consuming non-residential customer would see their bill increase from $877.45 to $1,238.50 under the declining block rate system.
Watson pointed out Minto’s non-residential rates were on the lower end of a comparison (12th out of 16) with other municipalities in the region, “because in the past with your rate structure you heavily subsidized high-consuming customers.”
Minto ranked fourth in residential rates among the same group of municipalities.
“High consuming customers haven’t been paying their share,” notes Watson, who said the recommended rate structure would amount to “taking the subsidization that’s happening currently and dropping it back a bit.”
The new rate structure contains built-in annual increases between 2016 and 2024.
Councillor Ron Elliott noted the new rates are being designed to cover capital and operating costs for water and wastewater systems over the long term, “but if everybody becomes more efficient, and gets a lower bill … can you explain how we get there?”
“If consumption goes down, the only offset to that is to increase the rates,” replied Watson, who explained a review of consumption patterns is being recommended after one year.
CAO Bill White pointed out “one other alterative to that is to get more efficient in how we operate.” White suggested using less water would result in reduced wear and tear on equipment, providing savings on repair and replacement.
Mayor George Bridge said as with any new system, there will be bugs to work out.
“As we go through this process it’s going to be a learning curve for both of us, town staff and you as consumers,” Bridge said.
A bylaw and recommendation on the rates is expected to come before council on July 7.
