Water rates for residents in the Town of Olds will be going up 23 cents per cubic metre to $2.54 per cubic metre while wastewater rates will be hiked $1.06 per cubic metre for residential customers and 61 cents per cubic metre for commercial customers to that same $2.54 per cubic metre effective May 1.
The decision was made last week as council passed all three readings of the bylaw amending the water and wastewater rates.
The increase in rates is needed in order to account for the 20-cent increase the Mountain View Regional Water Services Commission began charging the town beginning April 1 for water it buys from the commission. The rate went up to $1.20 per cubic metre from $1 per cubic metre previously. Town administration calculated that in the period between April 1 when the town's cost increased and May 1 when the new town customer rate will go into effect, the impact on the town's budget was estimated to be $18,540.
In order to recover that money, council was given three options: to absorb the cost into the operating budget and reduce costs and services; implement a rate of $2.51 per cubic metre with no other operating capital costs or level of service changes; and a third option of instituting a three-cent charge on top of the $2.51 per cubic metre until the end of December. After December the three-cent charge would disappear.
Coun. Mary Jane Harper said she was more in favour of the town absorbing the cost through the budget for the one month.
“I would be more in favour of absorbing this $18,000 over the year,” she said.
Coun. Wade Bearchell, though, disagreed with Harper and thought the town should pass that increase on to the end-user so as to not cause the town to be in financial difficulty. Norm McInnis, the town's chief administrative officer, also advised that he would be in favour of the three-cent premium as a temporary cost-recovery measure. McInnis also said he will be monitoring the MVWSC budget closely to see if subsequent rates passed on to the town can be justified.
Larry Wright, the town's director of operations, said the $18,540-figure was arrived at by plugging in the amount of water the town was billed by the MVRWSC in April 2010 and then multiplying that figure by the 20-cent increase the commission passed on to the town April 1.
Murray Ball, council's representative on the MVRWSC, said while this represents an increase for end-users, commission members felt it was better to begin construction in tandem with the wastewater line, rather than digging a second trench in the near future because that would be even more costly.
Wright said because the provincial government was late in commiting to the project — but has done so — that made a big difference in the price of the water project.
“The province went back and forth given the status of the provincial budget right now. They didn't know, timing-wise, when and what they could commit to. It makes a great difference in what the hard cost of water may be, if we're paying up front on a (percentage) basis, for capital,” he said.
Wright said town administration tried to come up with a reasonably fair premium to charge residents on their water bills for the next eight months to recover the money it will be spending in the next month on water.
“Based on what we were billed last year … we went back and said … ‘OK, is it two cents, is it three cents or what's reasonable based on the target information. It's not an exact science,” he said.
Mayor Judy Dahl said town representatives did all they could to cushion the blow of cost increases to the end-user — and that's why council got clarification on the business plan first and then got assurances the three-cent premium would end after eight months.
“Council had discussed (the three-cent surcharge) previously. There's absolutely no way we wanted to hit the citizens of the Town of Olds with a huge increase. So we had to sit down and really think about the best options that we had and this was one of the options that we felt was the strongest … to go with the least impact,” she said.
Dahl said the town is committed to full cost recovery on all utilities.
“That is one area that you certainly have to do that with,” she said.
"There's absolutely no way we wanted to hit the citizens of the Town of Olds with a huge increase. So we had to sit down and really think about the best options that we had."Mayor Judy Dahl, Town of Olds
