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by Doug Harvey
Water  Wastewater Rate Studies

Special Meeting of the Council on Monday, May 28, 2018

Disclosure of Pecuniary Interest and the General Nature Thereof

- None disclosed.

Water/Wastewater Rate Studies Presentation

Gary Scanlan from Watson & Associates Economists, was in attendance to present the Water/Wastewater Rate Studies for Central Elgin.

Legislation for Water and Wastewater

Since Walkerton new legislation has been passed by the Province to enhance the provision of services. These include the following:

  • Safe Drinking Water Act;
  • Sustainable Water and Sewage Systems Act;
  • O.Reg. 453/07 - Safe Drinking Water Act;
  • Clean Water Act; and
  • Water Opportunities Act.

Further Requirements:

  • Municipal Infrastructure Strategy
  • Infrastructure for Jobs and Prosperity Act, 2015

Water Opportunities Act 2010

  • The Act provides for the following elements:
    • Foster innovative water, wastewater and stormwater technologies, services and practices in the private and public sectors;
    • Prepare Water Conservation Plans to attain water conservation targets to be established by regulations; and
    • Prepare Sustainability Plans for Water, Wastewater and Stormwater Services.
  • The Financial Plan shall include:
    • An asset management plan for the physical infrastructure;
    • A financial plan;
    • For water, a conservation plan;
    • An assessment of risks that may interfere with the future delivery of the municipal service, including, if required by the regulations, the risks posed by climate change and a plan to deal with those risks; and
    • Strategies for maintaining and improving the municipal service to ensure future demand can be satisfied, consider technologies to improve the service and potential increased co-operation with other municipal service providers.
  • The rate study would provide inputs required to complete the Financial Plan required for licensing approval

Infrastructure for Jobs and Prosperity Act (IJPA), 2015

  • On December 27, 2017, the Province of Ontario released Ontario Regulation 588/17 under IJPA and has 3 phases that municipalities must meet:
    • Every municipality in Ontario will have to prepare a strategic asset management policy by July 1, 2019. Municipalities will be required to review their strategic asset management policies at least every five years, and make updates as necessary;
  • Strategic Asset Management Policy
  • Asset Management Plans - Current Levels of Service
    • Current levels of service
    • Asset (inventory) analysis
    • Current performance of assets
    • Lifecycle activities and costs to maintain current levels of service
    • Impacts of growth on current levels of service
  • Asset Management Plans - Proposed Levels of Service
    • Proposed levels of service
    • Proposed performance of assets
    • Lifecycle activities and costs to achieve proposed levels of service
    • Financial strategy
    • Impacts of growth on proposed levels of service
  • Phase 1 -Asset Management Plan (by July 1, 2021 ):
    • For core assets - Municipalities must have the following:
      • Inventory of assets;
      • Current levels of service measured by standard metrics; and
      • Costs to maintain levels of service.
  • Phase 2 -Asset Management Plan (by July 1, 2023):
    • Same steps as Phase 1 but for all assets.
  • Phase 3 -Asset Management Plan (by July 1, 2024 ):
    • Builds on Phase 1 and 2 by adding:
      • Proposed levels of service; and
      • Lifecycle management and Financial strategy

Present 2017 Rates

Municipality of Central Elgin

2017 - Water Billing Rates Base Charge
Base Monthly Charge $16.78
Volume Charge $2.810 per cubic metre

*Bulk Water Volume Charge is $3.232 per cubic metre
*15% higher than cost charged to Municipality Customers

2017 - Wastewater Billing Rates
Base Monthly Charge $20.01
Volume Charge $2.440 per cubic metre

Customer Profile

Metered Water Wastewater
PORT STANLEY 1,537 1,485
BELMONT 741 728
OAKVIEW (Union) 83 -
TRIDON SUBDIVISION (Lynhurst) 296 280
PORT STANLEY SECONDARY - -
PORT BURWELL SECONDARY 67 -
AYLMER SECONDARY 159 -
ST. THOMAS SECONDARY 1 -
ELGIN AREA PRIMARY 9 -
LONDON SECONDARY 9 -
Old Lynhurst/Eastwood with sewers 655 655
Norman/Lyndale/Centennial/Eastwood no sewers 216 -

Water and Wastewater Forecast Users and Billable Volumes

Totals are based on an average consumption of 140 cubic metres per customer.

Water Customer Forecast will increase from 2018 base of 3,788 at rate of 30 customers per year to 2027.

Water Volume Forecast will increase from 2018 base of 530,387 cubic metres at rate of 4,200 cubic metres per year to 2027.

Wastewater Customer Forecast will increase from 2018 base of 2,508 at rate of 30 customers per year to 2027.

Wastewater Volume Forecast will increase from 2018 base of 475,280 cubic metres at rate of 4,200 cubic metres per year to 2027.

Total Water Capital Expenditures for the period from 2018 - 2027 are $3,656,100.

Total Wastewater Capital Expenditures for the period from 2018 - 2027 are $2,025,400.

Capital Financing Options

  • Reserves
  • Development Charges
  • Debt
  • Grants
  • Operating Budget Transfers (Funding Reserves)
  • Municipal Act (Part 12)

Reserve Balances - December 31, 2017

Water General Reserves balance at Dec. 31, 2017 = (404,054)

Water Development Charges Reserve Fund balance at Dec. 31, 2017 = 9,136

Wastewater General Reserves balance at Dec. 31, 2017 = 498,899

Wastewater Connection Reserve Fund balance at Dec. 31, 2017 = 450,693

Wastewater Development Charges Reserve Fund balance at Dec. 31, 2017 = 663,487

Proposed Total Water Capital Financing from 2018 - 2027 = $3,656,100

Proposed Total Wastewater Capital Financing from 2018 - 2027 = $1,418,900

Lifecycle Infrastructure Costs

  • The age of the water system dates back to the early 1950's;
  • The age of the wastewater system date back to the early 1970's;
  • Total value of existing water infrastructure is $47.46 million;
  • Total value of existing wastewater infrastructure is $40.40 million;
  • This provides for a "per customer" investment by the Town of $12,578 for water and $12,834 for wastewater.

Operating Budgets

  • Operating expenditures are increasing over the forecast to recognize:
  • Inflationary Impacts
    • 2% for all operating expenditures
  • Purchased water assumptions (annual inflation)
    • 5.1 % for Malahide Secondary Water Supply System
    • 4.8% for Aylmer Secondary Water Supply System
    • 10.5% for St. Thomas Secondary Water Supply System
    • For the Elgin Area Primary Water Supply System the following annual inflationary factors have been used based on the Primary System's latest rate study:
      • 2018 and 2019 = 4.75 %
      • 2020 and 2021 = 3.75%
      • 2022 = 3.74%
      • 2023 = 3.25%
      • 2024 and 2025 = 3.24%
      • 2026 and 2027 = 3.25%

Rate Structure and Average Annual Residential Bill (Based on 140m3 Annual Volumes) - Water

  • From 2018 to 2022 the total water bill is forecasted to increase by 8% per year
  • From 2023 to 2024 the total water bill will drop to a 5% increase per 2025 onwards, the increase will be 2% per year.

Rate Structure and Average Annual Residential Bill (Based on 140m3 Annual Volumes) - Wastewater

  • From 2018 to 2020 the total water bill is forecasted to increase by 7% per year
  • In 2021, the increase will be 5% and in 2022 the increase will be 4%
  • 2023 onwards, the increase will be 2% per year

Factors Resulting in Calculated Rates

  • Reduced Annual Volumes - The average annual volumes, based on historic averages, assumed in the 2012 rate study was 175 m3. This has significantly decreased over the past six years to a current average annual of 140 m3.
    • The 2012 rate study forecasted that by 2018 total annual water volumes of 669,710 m3, the Current 2018 total annual water volume projection is 530,387 m3.
    • The 2012 rate study forecasted that by 2018 the total annual wastewater volumes of 503,850 m3, the Current 2018 total annual water volume projection is 475,280 m3.
  • The water meter replacement projects forecasted in the 2012 rate analysis was less than that contemplated currently and was spread over 2018-2021 vs. 2018-2019 in the current rate analysis. Also, the 2012 rate analysis did not identify a sharing of the replacement costs between water and wastewater services that the current forecast provides for.
  • The recent work on the wastewater treatment plant and pumping stations resulting in approx. $20 million of debenture financing increases future debenture payments by over $1 million annually. This work was not anticipated in the capital forecast in the 2012 rate analysis.

Comparison of Residential Annual Water and Wastewater Bill (based on 140 m3)

Municipality Water Wastewater Total Rank
Malahide $704.20 $939.84 $1,644.04 1
Middlesex Centre $614.08 $720.48 $1,334.56 2
Bayham (Port Burwell-Vienna) $650.32 $642.36 $1,292.68 3
Central Elgin (Calculated 2018) $644.04 $621.72 $1,265.76 4
Central Elgin (Current 2017) $594.76 $581.72 $1,176.48 5
Ingersol $473.16 $613.92 $1,087.08 6
Dutton/Dunwich $489.00 $584.20 $1,073.20 7
Thames Centre $333.30 $495.48 $$828.78 8
Tilsonburg $379.32 $369.00 $748.32 9
London $306.44 $264.75 $571.19 10
Woodstock $314.88 $238.92 $553.80 11

A motion was brought forward by Councillor Winkworth and seconded by Deputy Mayor Martyn that the Council of the Municipality of Central Elgin receive the Water - Wastewater Rate Studies as presented by Watson & Associates Economists dated May 28th, 2018; And further that Council defer consideration of passing of the 2018 Water - Wastewater Budget to a future date of Council. The Motion was Carried.


Last Updated: Tuesday, 29 May 2018 15:18:38 PM EST

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