Kitchener’s Water, Sewer Rates Rising Faster Than Inflation

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Kitchener Utilities crews work to repair a water main break on Charles Street East between Ottawa Street South and Borden Avenue South on in 2014. (Photo Credit: The Record)

Article courtesy of Catherine Thompson | Dec 4, 2015 | The Record | Shared as educational material

WATERLOO REGION — Water and sewer rates are rising higher than inflation in all three cities in Waterloo Region, but they’re rising highest and fastest in Kitchener.

Kitchener ratepayers are facing a projected increase of 7.6 per cent in their water bills every year for the next decade, and a 10.8 per cent increase every year for sanitary sewers. Rates in Waterloo are expected to rise around 4-5 per cent a year over that time, while they’ll go up about 6-7 per cent a year in Cambridge.

The increases will mean that an average Kitchener household will be paying $1,838 for water and sewer services in 10 years, compared to just $746 in 2014, if those increases are implemented.

That’s more than ratepayers in either of the two other cities will be paying.

Cambridge rates are expected to go from $951 in 2014 to $1,487 in 2024, while Waterloo’s are expected to go from $769 to $1,129.

Those numbers are based on estimated forecasts, which would have to be approved each year at budget time by the respective city councils.

Like municipalities all across North America, local cities are struggling to find ways to replace aging water and sewer pipes.

In Ontario, municipalities also face increased costs because laws passed after the 2000 Walkerton water contamination now require drinking water systems in the province to become financially sustainable — to charge customers what it actually costs to supply them with clean drinking water and a sophisticated modern sewage treatment system.

That’s why all three local cities are looking at increases for at least the next decade that are well above inflation.

But why are Kitchener ratepayers getting hit even harder?

The city bases its rate increases on its system, “how old it is, how big it is, its current condition,” said Ryan Hagey, Kitchener’s director of financial planning.

“Cambridge and Waterloo could have totally different numbers if their system is newer, or if they’re not spread out as much.”

Another factor is that Kitchener has no money left in its water and sewer reserve funds — a sort of long-term savings account. In years past, rates in Kitchener rose more slowly than costs, depleting the reserves.

Waterloo has reserves that are about where they should be for water and sanitary systems, said Denise McGoldrick, director of water services in Waterloo. “We use the reserves to soften the rate increases,” she said.

Kitchener began setting aside money in 2002 for an “accelerated infrastructure program”, but “that’s just to fund the work that needs to be done now, not to save for future work,” Hagey said.

“What we’re doing now isn’t enough. We need to do more, and since we haven’t saved for it, we need higher rate increases.”

And there’s plenty of future work: about 20 per cent of the city’s water pipes are 50 to 74 years old. Another four per cent are more than 75 years old.

Ratepayers in Cambridge have already gone through the pain of big rate increases. They saw rates jump 11.2 per cent in 2010, and increase more than nine per cent for several more years.

“We started earlier than Kitchener to address our backlog,” said Steven Fairweather, Cambridge’s chief financial officer.

“We got a lot of flak” when the first big rate increases were introduced, he said, but since then, there haven’t been many complaints. “We explained that represents the cost to move to sustainable service.”

Anyone who is having a hard time meeting those payments should talk to the city, Fairweather said. “People do run into difficulties. We do work with our customers on payment plans.”

Rate increases of hundreds of dollars over a fairly short period of time may be hard to swallow, but they reflect the actual cost of providing safe clean water to our homes, McGoldrick said.

That includes not only the cost of the pipes and the labour, but the costs to ensure quality control, safety testing, and preventive maintenance rather than simply carrying out repairs after a water main breaks.

“At what point do we reach a point where the increase becomes too expensive to afford?” McGoldrick said. “We know in comparison to European countries, the cost of water (here) is fairly low.”

The cost per 1,000 litres of water in Waterloo in 2015 is $1.66, compared to an average of $2.79 in 65 European cities in 2011 — from a low of 58 cents in Milan to $8.39 in Ghent, Belgium. , Twitter: @ThompsonRecord

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