Report to: Committee of the Whole Date of Meeting: December 19, 2006
SUBJECT: 2007
Water/Wastewater Rate Increase
PREPARED BY: Fuwing
Wong, Manager, Financial Planning
RECOMMENDATION:
THAT the report dated December 19, 2006 entitled “2007
Water/Wastewater Rate Increase” be received;
AND THAT the Town of Markham’s
water/wastewater rate be increased by $0.0929 per cubic metre effective January 1, 2007 to $1.5838 per cubic
metre;
AND THAT By-Law 2002-276, the
bylaw on fees and charges for services or activities provided or performed by
the Town of Markham, be amended to
reflect the increase in water/wastewater rate.
EXECUTIVE SUMMARY:
Not applicable.
FINANCIAL CONSIDERATIONS:
Based on discussions with the
Region of York (“Region”), the Region’s proposed Water/Wastewater increase is
currently 6.23% effective April 1, 2007. The recommendation is for the Town of Markham
(“Town”) to match the Region’s 6.23% increase resulting in the Town’s
water/wastewater rate increasing by $0.0929 per cubic metre (m3) to
$1.5838/m3.
The proposed 6.23% increase in
Region and Town’s water and wastewater rates are outlined below:
TABLE A – Water/ Wastewater Rate
Based on average consumption of
365m3 per year, the $0.0929/m3 proposed rate increase
would result in a $33.91 water bill increase per household in Markham.
In comparison with other
municipalities and regions, the Town’s current 2006 water/wastewater rate is between
the high and low end of rates for the GTA and at the low end of rates for
municipalities within York Region.
Aside from funding current
operations, the Town’s portion of the retail water/wastewater rate is also used
to build-up the Waterworks Reserve. As
outlined in the July 9, 2001
report entitled, “Waterworks Reserve Analysis”, several asset types, such as
hydrants, valves, chambers, of the Town’s Waterworks infrastructure will reach
their 50 year useful lives and need replacement beginning in 2020. Replacement costs are projected to nearly
double from the period 2011-2020 to 2021-2031.
As of the end of 2005, the Town’s Waterworks reserve was $6.60
Million. The following chart compares
the Town’s reserves to reserves of other municipalities and regions:
($ Millions)
A resolution was passed by Council
in June 2002 stating, “And that all further rate increases by Region of York by
automatically met by the Town of Markham with a percentage increase equal to
that of the Region”. Historically, the
Town receives projected water rate increases from the Region prior to the end
of the year and, at a minimum, matches the Regional water/wastewater rate
increases following a public meeting and Council authorization towards the end
of the year.
In accordance with the Municipal
Act (O. Reg. 244/02), the Town of Markham
held a public meeting on December 12,
2006 to advise the public of the 2007 proposed water/ wastewater
rate increase. A copy of the public
meeting presentation is attached to this report and comments received at the
public meeting are as follows:
- Staff
were requested to provide further information on the reasons why the
water/wastewater reserves of other municipalities are higher than
Markham’s waterworks reserve of $6.6M (2005 balance);
- Projections
for the reserve study should incorporate growth within the Town, including
future Official Plans; and
- Concerns
over aging infrastructure and reserve balances may require revisiting the
water/wastewater rates in mid-2007, pending completion and recommendations
from the Waterworks reserve study.
Staff is currently working on
reviewing the Waterworks asset inventories, replacement cycles and the adequacy
of the Waterworks reserve to determine if the current rates are adequate to
meet future capital infrastructure replacement.
In addition, regulations following Bill 175, the “Sustainable Water and
Sewage Systems Act, 2002”, are expected to be finalized by the end of 2006,
which may have an impact on future water rates.
Staff will bring a report forward
by mid-2007 to quantify the impact of the “Sustainable Water and Sewage Systems
Act, 2002”, waterworks infrastructure replacement and the final 2007 Regional
water/wastewater rate increase (should it be different than 6.23%).
ENVIRONMENTAL CONSIDERATIONS:
Not applicable.
ACCESSIBILITY CONSIDERATIONS:
Not applicable.
ENGAGE 21ST CONSIDERATIONS:
Not applicable.
BUSINESS UNITS CONSULTED AND AFFECTED:
Not applicable.
RECOMMENDED
BY: ________________________ ________________________
Barb
Cribbett, Treasurer Andy
Taylor, Commissioner, Corporate Services