County Water and Wastewater rates discussed in virtual town hall

The Picton Water Purification plant on Spencer St. (Jason Parks/Gazette Staff)

A five-year plan for Prince Edward County water and wastewater rates are being discussed for Prince Edward County.

A virtual town hall discussion was held on Oct. 6, led by Amanda Carter, Director of Finance, Don Caza, Director of Water and Wastewater Services and Peter Moyer, Director of Development Services. The community was previously invited to give feedback on the municipality’s Have Your Say website and at the meeting itself.

Carter explained the County began working on this rate study early in 2020 with focus on the work that needed to be done on capital programs and different ways to finance capital costs, which she said has been demonstrated through the adoption of an area-specific development charge.

“Through this process, we have also retained the services of Watson & Associates Economists Limited to prepare the Water and Wastewater Rates Study that is out for circulation now,” she added.

The rates are approved by council every five years based on staff and consultant recommendations and are part of the municipality’s obligations to launch a water financial plan under the Safe Water Drinking Act. Watson & Associates Economists Ltd presented a study to the Committee of the Whole in August noting that the current water and wastewater rates are set to expire Dec. 31, 2021.

The current rate structure, Carter explained, has a monthly base charge – calculated based on meter size – and a consumptive rate – calculated based on meter squared. The base charge, she said, is normally used to support the capital infrastructure cost and the consumptive rate is used to support the operating costs for six drinking water systems and two wastewater systems. The cost of water and wastewater services are funded by the users of the system, not the municipal tax levy.

In the presentation, Garrett Osborne, Engineering Services Project Manager, explained that through car The study is to be decided this fall prior to the capital budget discussion in 2022. According to the County’s Have Your Say portal, council directed staff to consult the public on four water rate scenarios to determine: Do we pay more for water in the short term, or take on debt in favour of a slower rate increase? How quickly should we try to achieve “full lifecycle funding” of our utility through water rates? Should rates increase across the board or be tied to certain types of water usage?

Caza said a common theme within the comments from Have Your Say focused around why rates have to increase at all and why they cannot decrease.

“There are a few things. It comes down to the number of users we have paying into the system. A lot of times, people don’t realize with having six systems and a little over 6,000 service customers, if you compare this to our neighbours; our large municipalities who have, say, one or two facilities and they have thousands of users – two and three times as many as the County does – that really does help to keep the rates lower,” he explained. “We are also seeing some more recent challenges with the cost of some of the things that we use on a day-to-day basis in modern wastewater facilities – things like chemicals and parts and equipment, perhaps some of it is COVID related, transportation costs – all of those sorts of things are starting to contribute more and more.”

The four water and wastewater scenarios are as follows:

Scenario 1 – Full Funding by 2030

Water rates increase to support full lifecycle funding of the water and wastewater utility by 2030. This means that by 2030, the rates are sufficient to support our projected capital needs,” according to the website. This scenario would be the shortest timeline to full lifecycle funding and would increase year-round.

Scenario 1a – Full Funding by 2030 with Seasonal Rates (April to September) This scenario achieves the same outcome as Scenario 1, but does it in a different way. In this scenario, water users will pay a higher rate for summer season water consumption. Water users pay more per cubic litre of water consumption from April to September. This scenario achieves the full lifecycle funding goal by 2030, by putting more of the burden on summer water usage. (i.e. seasonal businesses, residential summer consumption like filling pools and watering lawns). Shortest timeline to full lifecycle funding. County takes on less debt to fund the water and wastewater utility. Water users pay more than current rates for summer consumption. Water users pay less than current rates for non-summer consumption.

Scenario 2 – Full Funding by 2034 In this scenario, water rates increase more gradually, achieving full lifecycle funding by 2034. By stretching the timeline for achieving this funding goal, The County will take on a larger amount of debt to fund the acquisition, operation, maintenance and disposal costs of the water and wastewater utility. This debt will be paid by future generations. Longer timeline to full lifecycle funding. County takes on more debt to fund the water and wastewater utility in the meantime. Rates increase year-round.

Scenario 2a – Full Funding by 2034 with Seasonal Rates This scenario achieves the same as Scenario 2, but does it in a different way. Similar to Scenario 1a, rates will be higher for summer water consumption. Longer timeline to full lifecycle funding. County takes on more debt to fund the water and wastewater utility in the meantime. Water users pay more than current rates for summer consumption. Water users pay less than current rates for non-summer consumption. According to the presentation, the cost to maintain the underground infrastructure at the seven plants across the municipality is the most significant contributor to water rates. Other factors within the study include the long-term capital plan for what is required over the next 10 years and long-term operating costs and growth calculations for water and wastewater utility users in the next five.

Carter noted two studies which will influence long-term water and wastewater rates past the current five-year study. The first is a regional Wellington water treatment plant environmental assessment, which is the beginning request-for-proposal phase.

The other study is a proposed Master Servicing Plan for Picton, which features a timeline for when capital work needs to be completed in the long-term – to be put forward in the 2022 capital budget discussions.