MAPLETON – Council here has approved a plan to increase water and wastewater fees if its request for proposals (RFP) for companies to take over the systems renewal project is ultimately unsuccessful.
In April, council announced its plan to invite companies with applicable experience to invest in and propose solutions for, the township’s water and wastewater systems renewal.
Since then council has issued RFPs to six groups of companies.
“The plan at this point would be to increase the fees and the plan then would be to borrow money from capital reserve, and fund some of the infrastructure at a very generous interest rate,” said director of finance John Morrison.
Proposed user fees would be broken into two parts: a fixed charge or base charge based on meter size, and a variable charge based on volumetric use.
The monthly base charge recovers a fixed fee from each resident regardless of the amount of water and sewer service used and would only vary by meter size. The fixed charge would recover the township’s administrative costs.
Volume-based user fees depend on the volume of water being used, determined by subdividing residents into size blocks and charging block rates.
An example provided by Morrison in the report outlines a first block which encompasses “the largest amount that a customer in a single-family dwelling might use,” and a second block is set at the consumption limit for most commercial uses.
The volumetric charge would then “decrease in steps as usage increases,” the report read. The volume-based charge would recover the township’s operating costs.
The breakdown between the two types of charges, based on the proposal, are:
– 65 per cent of the user fee would derive from the fixed fee and amount to a revenue of $913,483; and
– 62% variable amounting to a revenue of $482,221.
“The proposed rate structure would increase the average residential bill by $21.04 per month – a 16.23% increase,” read the report.
“The proposed rates would increase the average residential homeowner’s (bill) to $150.66 per month or $1,807.88 per year,” a 16% increase from the current average of $129.62 per month or $1,555.40 per year.
“The rates for the years 2021 through to 2023 would increase by 2% per year,” the report also read.
The amendments would take effect by April 1, 2020 if the township has not received and accepted an RFP by then.
“This is plan B, if things don’t go well with our proponents of the RFP,” Mayor Gregg Davidson said.
Councillor Paul Douglas asked why council would not wait until the window of opportunity on the RFP was closed.
“My thought process was that I’m aware that the proponents may have their own ideas with respect to pricing and I would be enabling them at that time to come forward with their own proposals,” explained Morrison.