Report to: General Committee – Finance & Administrative Date of Meeting: 2008-11-24
SUBJECT: 2009 Water/Wastewater
Rate Increase
PREPARED BY: Andrea Tang,
Manager, Financial Planning
RECOMMENDATION:
That the
report dated November 24, 2008 entitled “2009 Water/Wastewater Rate Increase” be received;
AND
THAT the 2009 Water/Wastewater rate increase be equivalent to the Region of
York’s (“Region”) estimated increase of 12.66% resulting in an increase in the
Town of Markham’s (“Town”) Water/Wastewater rate of $0.2132 per cubic metre (m3)
(Region’s increase of $0.1415 and Town’s
increase of $0.0717);
AND
THAT in addition to the Region’s increase, the 2009 Water/Wastewater rate
increase will include the second year of the approved 10 year phase-in of the Water/Wastewater
Infrastructure Surcharge of $0.0621/m3;
AND
THAT effective January 1,
2009, the total 2009 Water/Wastewater rate be increased from $1.7671/m3
to $2.0424/m3, an increase of $0.2753 or 15.58%;
AND
THAT By-Law 2002-276, the bylaw on fees and charges for services or activities
provided or performed by the Town, be amended to reflect the increase in
Water/Wastewater rate;
AND
THAT staff be authorized and directed to do all things necessary to give effect
to this resolution.
A resolution
was passed by Council in June 2002 stating “And that all further rate increases
by Region of York be automatically met by the Town of Markham with a percentage 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 Region’s 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 November 18, 2008 to
advise the public of the 2009 proposed Water/Wastewater rate increase. A copy of the public meeting presentation
(Appendix A) is attached to this report.
OPTIONS/DISCUSSIONS:
Region’s Increase
Based on
discussions with the Region, the estimated Water/Wastewater increase is
currently 12.66% effective April
1, 2009. Regional Staff
advised that a report will be tabled to Transportation & Works Committee on
December 3, 2008. If approved, the report will be brought
forward to Regional Council for approval.
The
recommendation is for the Town to match the Region’s estimated 12.66% increase
resulting in an increase to the Town’s Water/Wastewater rate of $0.2132m3 to
$1.8976m3 effective January 1, 2009 (Region’s increase of $0.1415 and Town’s increase of
$0.0717).
Water/Wastewater Infrastructure Surcharge
In addition to the Region’s estimated
increase, Council approved a Water/Wastewater infrastructure surcharge on November 27, 2007 to address
the ongoing replacement & rehabilitation requirements for Waterworks
infrastructure.
The approved infrastructure surcharge of
$0.4137/ m3 is to be phased-in over 10 years with an increase of
$0.0827/m3 (20% of the total increase) in 2008, and an increase of
$0.0621/m3 (15% of total increase) in 2009. The remaining 65% increase of $0.2689/m3 will
be spread evenly over the following 8 years, which is equivalent to an increase
of $0.0336/m3 per year from 2010 to 2017 inclusive.
Effective January 1, 2009, the cumulative infrastructure
surcharge will be $0.1448/m3.
FINANCIAL
CONSIDERATIONS:
The proposed $0.1415/m3 (12.66%)
increase in Region and Town’s Water/Wastewater rates and the second year
phase-in of the Infrastructure Surcharge of $0.0621/m3 are
outlined below:
TABLE A – Water/Wastewater
Rate
The Town’s 2009 water/wastewater rate
will be increased from $1.7671/m3
to $2.0424/m3, an increase of $0.2753 or 15.58%.
Impact
to Residents & ICI Customers
An average household has water
consumption of 342m3
per year. With a total increase of $0.2753 increase/m3 in 2009 (Region’s
increase of $0.1415/m3, Town’s increase of $0.0717/m3 and
Town’s infrastructure surcharge increase of $0.0621/m3), there will be an increase of $94.15 to an average household bill (Region’s increase of $48.39,
Town’s increase of $24.52 and Town’s infrastructure surcharge increase of
$21.24). The
impact on the top 10 ICI customers, including a health care provider,
manufacturers, and hospitality providers, will range from $33K to $74K per year
(Region’s increase $17K to $38K, Town’s increase $9K to $19K and the Town’s
infrastructure surcharge increase $7K to $17K).