DIDSBURY - Town council has directed administration to prepare a request for proposal (RFP) for the hiring of a consultant to examine the municipality’s water and wastewater rate structure.
The direction came during the June 25 regularly scheduled council meeting and followed the presentation of a report prepared by administration on the instruction of council.
In February, council directed administration to complete a full review of the water and wastewater utility fees structure.
In preparing the report, administration reviewed all residential water and wastewater fees for all Alberta municipalities.
“The data shows that there are only two municipalities (Stony Plain and Spruce Grove) which have a variable only fee structure,” the report states.
“Both of these municipalities have self-supported water and wastewater departments, as does Didsbury, meaning the departments have no reliance on property taxes.”
Didsbury currently charges a fixed fee per residential unit.
“The most common fee structure in Alberta is a combination of a fixed fee and a variable rate based on consumption. Another method is a block rate system in which there are different levels of variable rates depending on the level of consumption.”
A variable only rate structure would charge customers based solely on consumption using a set dollar amount per cubic metre of water consumed, the report states.
“There would be no fixed monthly fee, therefore if no water was consumed the bill would be zero dollars.”
Administration concluded that strengths-opportunities of the variable only rate structure include high consumer equity, support for conservation, and potential for longer-term lower overall capital costs for capacity enhancements, as lower consumption per capita will help delay future investments for additional capacity.
Weaknesses-threats of a variable only rate structure included less revenue predictability, high volume users will end up paying significantly more per month which may affect economic development, and determining cost of service for unique customer classes, if necessary, will take expertise of consultants, time and data.
“The variable only rate structure achieves equitable cost for all users, and drives water conservation,” the report states. “However, it has the possibility to negatively affect economic development due to the rising cost for high volume industrial users.”
Mayor Rhonda Hunter said: “We do want a user pay system but at the same time we don’t want it to be a detriment. We don’t want it to inhibit people from the development side moving to town and seeing developments here based on what might be cost inhibitive measures of water and wastewater rates.
“We want to keep that in mind and have a good balance of a good user pay system that is reasonable and equitable and fair for everyone.”
The motion passed by council directed administration to “initiate the request for proposal process with a review of the allocation of employees, administrative costs and internal charges to explore a variable only rate structure for 2020.”
Coun. Dorothy Moore did not attend the June 25 council meeting.
