Water rates going up due to lower than expected growth
Water and sewer rates will be increasing in Clearview Township as a result of unrealized growth projections.
At the Nov. 4 council meeting, Ken Sharratt, of Sharratt Water Management, presented a forecast that will serve as the foundation for a six- year Water Financial Plan and 10-year Municipal Asset Management Plan that are required by the province.
The Water Financial Plan must be complete and approved by council before the end of 2024 as it is a requirement for the renewal of Clearview’s Drinking Water Licenses, a stringent system that evolved from the Walkerton E. coli outbreak in 2000. Sharratt said the financial planning has totally changed the way authorities develop rates, requiring a much longer timeframe in order to have money ready when work needs to be done to renew the systems.
He said the rate study is the foundation of the financial plan, taking into account operating costs, inflation, and capital costs relating to new growth (usually covered by development charges.)
“Secondly, there is the renewal of older infrastructure and you do have some really old infrastructure that has to be renewed periodically,” said Sharratt.
The third factor is the number of users, an increase of which helps to offset the rates, and water usage.
The goal is to balance all of the costs with revenues.
The township’s water system is comprised of six separate communities: Stayner, Creemore, New Lowell, Buckingham Woods, Nottawa, and Colling Woodlands. The system has 3,066 water connections as of Dec. 31, 2023. Approximately 80 per cent of the water connections are in Stayner and Creemore.
The new water rates represent an increase of 4-5 per cent per year from 2025 to 2034.
Inflation in operating expenses is over four per cent and inflation in capital expenditures is projected at three per cent. The increase is needed to cover inflation as well as upcoming large capital renewal and replacement investments.
The new rates assume there will be 150 new connections to the system per year over the next decade. If the growth isn’t realized, the rates will have to be adjusted.
“This rate really will only be valid for at most five years because inevitably things change, as we discovered to our discomfort over the last five years,” said Sharratt. “Almost none of our projections worked out very well because we didn’t get the users in 2019.”
With regard to inflation he said, “When I was here we were looking at about two per cent, now it’s more than double that so things have changed. They haven’t been normal and I don’t think we’re in normal yet.”
“Water and sewer rates across North America are rising faster than inflation because everywhere efforts are being made to make water cleaner and safer, and to clean up the wastewater to protect the environment more rigorously.”
The wastewater bills increase at about 10 per cent per year over the next five years, and then level off at three per cent after 2029.
“We’ve fallen behind on the wastewater side because in 2019 we overestimated the amount of growth,” said Sharratt. “Growth didn’t happen because of the pandemic and all of the craziness that has happened since with inflation and contractors having a big problem trying to figure out how to make money.”
Wastewater bills in Clearview are very low compared to other nearby communities. Future increases beyond 2029 will depend on inflation and the number of new users. Sharratt said wastewater revenues should be carefully monitored to ensure that the projected revenues are realized.
He ended his presentation to council with an illustration of how affordable water is in Clearview Township, saying for one dollar a person can drink 785 340-ml glasses of water. That dollar will also get them a 30-minute shower, 59 flushes of a high efficiencytoilet, and three loads of laundry in a new front load washing machine.
Water bills
- The fixed portion of the rate increases at about 4-5 per cent. The variable rate that depends solely on the amount of water used, increases from $2.81 in 2024 to $3.21 in 2029, or about 3-4 per cent through 2025 to 2029, and then levels off at an annual increase of about 3 per cent.
- A user taking 70 cubic metres per year is projected to pay $374 in 2024, and $454 by 2029. • Someone using 125 cubic metres per year will pay $528 in 2024, and $631 in 2029.
- A user of 300 cubic metres per year will pay a water bill of $1020 in 2024, and $1,192 in 2029.
- A very large user will pay about $650,573 per year in 2024, increasing to $742,923 in 2029.
All figures are in inflated dollars.
