The Drumheller Town Council has reversed its previous position regarding the 2013 water rates at their meeting on January 14.
Previously, Council had considered increasing the water rates by three per cent plus a $1 surcharge added to each bill. Now, they have removed the surcharge, but voted to increase the Town’s water rates by five per cent for all users.
“It’ll give us an additional $39,000 for reserves we are going to need in the future. We were able to offer a utility rate with no additional costs on the waste water side,” said Mayor Terry Yemen.
Acting Director of Corporate Services Bill Wulff presented different options the Town could pursue; a three per cent increase, three per cent plus $1 surcharge, three per cent plus meter equivalent surcharge, and a five per cent increase.
The first option would cover the Town’s operating costs, interest of debentures, and depreciation costs, but leave little left over for reserves.
At their last meeting prior to the holidays, Council agreed reserves needed to be bolstered and opted for a three per cent increase plus $1 surcharge.
However, upon investigation, that option presented challenges.
“The scenario that was established may be contrary to the policies set by the Alberta Utilities Board regarding fairness of charges and therefore could be subject to challenge,” said Wulff.
He went on to explain the third option, to add a meter equivalent surcharge, would be consistent with the Alberta Utilities Board policies, but would considerably increase the surcharge for some users.
There were also logistical concerns.
“If we put in a separate line item on each bill, we don’t have those codes in our (billing) system. It would take about $1,000 to have someone come in and install that code and would take three to four months to implement,” said Wulff.
In addition, Wulff explained extra postage would be required for some bills and could result in an extra $500 per year being spent on mailing out bills.
When the issues were weighed, Council opted to implement a five per cent increase to water rates, which will result in an increase in revenue of $97,762.82 over 2012. A large part will be set aside as reserve funds.
“In my conversations with the public about our intentions, they understood the state of our reserves for this crucial utility. When it’s explained appropriately, I didn’t encounter much negativity,” said Councillor Jay Garbutt, who made the original motion to add the $1 surcharge.
“When we’re talking in dollars, we’re talking a flat rate of $10.80 versus $11.00. For the water rate, we’re talking about the difference between $1.40 and $1.42. It’s not a staggering change, but does accomplish our goal (of building reserves).”
For a family using 15 cubic metres of water per month, the increase would result in a water bill of $66.00, an increase of $1.40 over 2012 rates.
For Drumheller’s opinion of the surcharge, see the results of our online poll further down on this page.