Council has approved an increase in both water and sewer fees in order to pay for replacements to the city’s aging infrastructure.
Water will be going up by 10 per cent, or $22 more per month, in each of the next five years and sewer fees will rise by six per cent ($21 per month) over the same period for flat user fees.
Ron Neufeld, the city’s general manager of operations, and City Manager Andy Laidlaw told council Tuesday night that some city pipes are cracking and need to be replaced but the city isn’t moving fast enough to make the costly improvements.
“We have an infrastructure renewal program that is too slow to keep up,” Laidlaw said. “We need to plan to accommodate the growth (in population) in respect to infrastructure (and) we need to replace our infrastructure which is aging.”
Currently, water and sewer revenues are only covering operational costs and are not enough to make the necessary upgrades.
The city needs $35.7 million for water projects and is looking at a revenue gap of $5.79 million. The city’s 2013-2017 financial plan has the city borrowing $10.2 million, receiving $13 million from BC Hydro for the new water intake related to the John Hart project, an $8.6 million draw on city reserve accounts, the rate increases approved on Tuesday, as well as $3.9 million in federal and provincial government grants but those are not yet secured.
For sewer, the city is looking at $25.8 million in projects but will be $3.63 million short. The projects are expected to be funded through $4.8 million of borrowing, $1 million in federal and provincial government grants (also unsecured), a $20 million draw on reserves, and the sewer rate increases.
As it stands right now, the current financial plan provides for $1 million in both water and sewer replacement each year.
Ron Neufeld, the city’s general manager of operations, said based on current market conditions, $1 million only funds about one kilometre of pipe renewal. The problem is, 50 kilometres of the city’s existing water and sewer mains are already past their serviceable life, which represents a $50 million infrastructure deficit. Neufeld reiterated what Laidlaw said that the current renewal rate does not keep pace with the city’s aging infrastructure. As of today, 24 kilometres of water pipeline need to be replaced, increasing to 102 kilometres by 2033 at the current renewal pace while 26 kilometres of sewer line need to be replaced, which will increase to 67 kilometres by 2028 at the current speed – a pace that Neufeld said needs to be increased for both water and sewer.
Neufeld presented council with a Powerpoint presentation which showed concerning slides.
He noted that by 2018, 31 kilometres of sewer pipeline will need to be replaced and with just 5.2 kilometres being scheduled for replacement from 2013-2018, there will be a 25.8 kilometre deficit. That trend continues up until 2033 when 86 kilometres of pipe will need to be replaced and with just 20.2 kilometres projected for replacement from 2013-2033, there would be a 65.8 kilometre deficit. The conditions are similar for water pipes.
Neufeld said the approved water and sewer rate increases will begin to provide some ability for emergency repairs, borrowing money, an increased pace of infrastructure renewal, and contributions to reserves.
Coun. Andy Adams noted Campbell River is not alone and that aging infrastructure is a problem nation-wide. He said it’s possible the federal government will make funding available to local governments this year for infrastructure projects.
“This isn’t a Campbell River problem, it’s a national problem that really needs to be addressed,” Adams said. “All the municipalities have been lobbying the federal government to expand infrastructure funding and (Finance Minister) Mr. (Jim) Flaherty has indicated that may be happening.”
On that basis, council approved the water and sewer rate increases, subject to review or adjustment if the city is successful in obtaining government grants.