City makes case for water rate hikes

Hey there, time traveller!
This article was published 14/09/2023 (934 days ago), so information in it may no longer be current.

Fewer than a dozen members of the public gathered in the foyer of Brandon City Hall on Wednesday evening to participate in a public hearing that will help determine whether water and wastewater utility rates will nearly double over the next three years.

The city is seeking approval from the Public Utilities Board to increase water and wastewater utility rates it charges residents and businesses every year from 2023 through 2026, with those rises coming on Jan. 1 every year.

The three-person panel representing the PUB was comprised of chair Shawn McCutcheon and members Irene Hamilton and Jack Winram, who said comments from the city and ratepayers will help the board decide whether to approve, deny or ask for changes to the application.

Speaking on behalf of the city were Coun. Shaun Cameron (Ward 4), city manager Ron Bowles, finance manager Troy Tripp and director of utilities Alexa Stangherlin.

Several other members of Brandon City Council, city staffers and fire Chief Terry Parlow were in the audience.

While the percentage increases are large, Bowles said in his introduction that Brandon’s rate is low in comparison to other communities on the Prairies and will remain lower than Winnipeg, Selkirk, Moose Jaw and Regina’s 2023 rates when the proposed increases are fully implemented in 2026.

Though the increases are being discussed now, work surrounding them have been in the works since 2019. The COVID-19 pandemic delayed the progress of that work, with Bowles saying the process was “extraordinarily drawn out.”

He said the goal of the city’s water utility is not just to obtain water from the Assiniboine River for its residents, but ensure it is clean and safe when used by ratepayers and returns to the river in better shape than it left.

The utilities also need to be sustainable, which Bowles said means paying for capital upgrades to ensure that standards continue to be made.

Going forward, he said the city needs to change some of the ways it manages the finances of its utilities. That includes performing annual reviews to see if rates need to be increased due to deficits or increased operating costs.

Also, Bowles said the city will seek to communicate more proactively with both the PUB and the public regarding possible changes, including making more frequent rate increase requests to try to prevent problems with delayed implementation.

At one point, Winram asked city representatives why Brandon had not complied with a condition in a 2016 PUB order requiring the city assess the adequacy of its water and wastewater rates and file a report with an associated rate revision request by no later than June 30, 2018. Bowles said he was unaware of that condition.

The last time the city applied for a water and wastewater rate increases was in 2015.

Consultant Dale Lyle said during the city’s presentation that the increases and rate riders proposed include a 10 per cent contingency to create a surplus in case of unforeseen expenses, room to save for future upgrades, paying for upgrades to the municipal water treatment plant, making up for previous years’ deficits and increase to operating costs.

The total capital costs associated with these factors identified in the city’s last rate study was estimated to be around $189.5 million. The city is expecting to have to borrow $80.65 million to help pay for capital improvements as well as associated interest and amortization expense.

Elliott Oleson, a Brandon Sun columnist who ran for mayor last year, said the gap between rate increase requests was a conscious choices by city councils over the year so they could tell people they were keeping rates as low as they could when they should have been making incremental increases over a longer time.

He said the increases in rates will ultimately be passed on by landlords to lower-income residents, who will bear the brunt of the cost.

The chair of the Spruce Woods Housing Co-op, Eva Cameron, told the panel her facility would no longer be able to supply affordable rents to its residents should the increases go into effect.

“I get it, I get that we need to have those increases,” she said. “It’s frustrating that it’s taken five years because if they had gone up by two or three per cent per year, we might have been able to work out something in our community. This is going to kill us.”

Council had hoped the increases would be approved in time for the first increase to go into effect on July 1 this year after making its application last year, but approval has yet to be granted. Future increases are planned for Jan. 1.

This summer, the board told the Sun that errors in the city’s application needing to be corrected delayed it entering its queue until January of this year.

This delay has led the city to estimate it will end the fourth quarter with a utility deficit of around $1.35 million. Lyle told McCutcheon that the city would likely be submitting a future application relating to deficits in the 2022 and 2023 fiscal years.

Currently, residents pay $1.66 per cubic metre for water services and $1.63 per cubic metre for wastewater services on top of a quarterly service charge of $17.48.

By the end of the implementation period, if approved, residents would be paying $3.062 per cubic metre for water service, $3.05 per cubic metre for wastewater service and a quarterly service charge of $21.51.

During the presentation, Lyle said a family of four using about 46 cubic metres of water per quarter would see a $57.28 rise in annual costs after the 2023 increase, $124.28 extra in costs after each of the 2024 and 2025 increases and a $126.12 increase in costs after the final increase in 2026.

Brandon also wants permission to implement a debt surcharge of $0.172 per cubic metre of water to pay for the construction of a new chemical building at the municipal water treatment plant.

That facility, which has already been built, allowed the city to switch from using chlorine gas — which can be hazardous to transport — to the safer to use sodium hypochlorite.

McCutcheon said the board will deliver a decision as soon as it can.

» cslark@brandonsun.com

» X: @ColinSlark