Area D water rate hikes put off for now

Strathcona Regional District Director Brenda Leigh convinced other directors to hold off on a substantial water rate increase for Area D

Strathcona Regional District Director Brenda Leigh convinced other directors to hold off on a substantial water rate increase for Area D.

Regional district staff were looking for direction from the board at its meeting last week as to how to deal with rates which are set to go up by 21 per cent this year. The City of Campbell River supplies bulk treated water to the northern portion of Area D (Crawford Road area) and notified the regional district that rates were going up to $0.80 per cubic metre when the water supply agreement expired in May 2012. The new rate took effect Jan. 1, 2013.

Tom Yates, acting chief administrative officer for the Strathcona Regional District, pointed out that the regional board of directors approved a financial plan that projects a water user rate revenue of $351,721 based on a 21 per cent increase over the 2012 rates and if directors do not officially approve of increasing the rates, there will be a deficit.

“The current user rates will not generate sufficient revenue to cover the costs of providing the service in 2013,” Yates said in a report to the board. “Unless the Area D water rates bylaw is amended, staff will issue bills to users of the water system at the current bylaw rates ($232 minimum residential charge), which will incur a revenue shortfall from 2013 financial plan targets and may result in a 2013 deficit in the range of $62,000.”

Leigh said she would prefer to wait until after Aug. 1 to make a decision since Area D residents have until Dec. 31 of this year to pay the fees without incurring interest charges.

“The issue of a potential deficit is unknown right now because of a board motion that said a professional mediator will be appointed,” Leigh said. “It’s premature to set the rates and charges now when we can do it after August 1 when we know what the situation is.”

Leigh was referring to talks between the regional district and the city that have been on going for more than a year and a half and are expected to continue over the next few months.

The city has said the water rate is fair and will bring Area D customers in line with the city’s fee structure for all water customers outside its boundaries.

The city’s rates are established based on the funding required to cover the annual operating and maintenance costs for the water system, as well as upgrading and replacing the various components of the water system (pipes, pumps, treatment facilities, reservoirs, etc.) as the water system ages.

Wate rates are higher for customers located outside the city limits to reflect the higher cost of delivering water to the outer limits of the city’s water system and compensate for water charges that customers within city boundaries pay, but that the city is unable to collect from customers outside city limits.

Leigh has said Area D is the victim of an unfair system that’s taxing residents without representation.

“Area D is currently subject to an unfair system where our taxpayers are not represented on any water committee,” Leigh said. “We are not told what we are being asked to pay for, except that the proposed increases are city policy. This is the anti-thesis of democracy. This is unfair.”

Directors in the end voted to defer further consideration of the matter until after August 1.