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Budget 2021: Council wrestles with costs of keeping water system safe

Council dives into water/wastewater budget as 2021 budget finalization process kicks off
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Greater Sudbury's finance and administration opened their 2021 budget finalization process on Wednesday evening, with discussion focused largely on the city's water/wastewater operating budget. (File)

Greater Sudbury's finance and administration committee opened their 2021 budget finalization process on Wednesday evening, with discussion focused largely on the city's water/wastewater operating budget. 

While no resolutions on the report were passed, council did opt to change their procedure when it comes to this year's budget process as Ward 5 Coun. Robert Kirwan tabled a motion that will allow council more leeway when it comes to reconsideration of passed budget resolutions.

In the city's procedural bylaw, in order for a reconsideration vote to pass it requires the support of two-thirds of council. Kirwan's motion, which was passed, calls for a majority vote in order to reconsider any resolutions that are passed throughout the process of finalizing the 2021 budget.

The city is looking at a water/wastewater operating budget in the gross expenditure amount of $86,407,809, representing a user-rate increase of 4.8 per cent, a rate increase that was approved in December.

Council will also be looking to approve a water/wastewater capital budget for 2021 in the amount of $45,030,952, that will be funded mainly from contributions from water/wastewater user fees, in the amount of just over $34 million.

Additional funding will be provided through $960,000 in federal grants and $9,399,970 from the city's reserves and reserve funds.

"The water rates were approved in December. What we're doing here in the operating and capital budget is approving the level of expenditures," said finance committee chair and Ward 7 Coun. Mike Jakubo.

Ward 11 Coun. Bill Leduc noted $1.7 million in other revenues listed in the budget document, asking what it represented and where the money had come from.

Dion Dumontelle, financial coordinator with the water/wastewater leadership team explained that the amount was from other miscellaneous revenues.

"Because we're user-fee funded, we have sources of other revenue," said Dumontelle, saying additional revenues are collected on liquid waste from the receiving station at the Kelly Lake Treatment Plant, as well as from private sprinklers and hydrants and bulk water sales.

Ward 1 Coun. Mark Signoretti, who often speaks with the taxpayer top of mind, asked if there were any opportunities to lighten the load when it comes to water rate increases that won't be slowing down any time soon.

"We notice that it's a 4.8-per-cent increase for 2020-21 and we're looking at percentages like this for the next 20 years to achieve financial stability," said Signoretti

"Is there any way we could alleviate some of the pressures off the users for the next budget because these increases, as much as it's needed, it's a significant increase year after year. Is there anything that would allow us in the next 20 years to look at reducing the increase to the user so it's a bit more palatable to absorb on an ongoing basis."

Jakubo explained that council is beholden to its citizens to adhere to the Clean Drinking Water Act.

"Council and each of us as individuals on council have a responsibility under the Clean Drinking Water Act to make sure that we're funding our water and wastewater operations and capital program to a responsible level to ensure a safe and adequate drinking water system," said Jakubo.

"We approve master plans every so many years, so I'm looking to staff to specify when we last approved the rate plan and what were some of the considerations, and how did we arrive at the 4.8-per-cent increase."

General manager of growth and infrastructure Tony Cecutti informed council that much of the determination of the water rate is largely tied to the city's long-term financial plan.

"The components that built that plan are a broader understanding of the needs to maintain our assets as well as build infrastructure that meets the future needs of the community," said Cecutti.

"It's really a combination of both those things that are driving us to an understanding of the long-term financial needs. Certainly watermain breaks are one measure of the health of the infrastructure and we're doing our best to put plans in place … but every year that goes by that infrastructure ages.”

This means the city must ensure there are funds set aside not only for current needs, but also to address future liabilities of aging infrastructure that needs to be maintained and eventually replaced.

Ward 4 Coun. Geoff McCausland spoke in favour of making infrastructure investments, specifically water/wastewater systems, indicating that spending was needed in order to mitigate potential costs down the road.

"I just want to highlight that we chose the slowest increase possible. This is the minimum increase that we're allowed to make through the legislation," said McCausland

"If we extend it any longer and make these increases any slower we jeopardize the future, the next generation of Sudburians. At a certain point, the inflation costs of construction to fix these assets will outpace the investment.

"These increases are coming because historically the correct amount of investment to maintain the assets wasn't paid. That's what happened for Walkerton, that's what changed the legislation and that's why we suddenly have to pay more way more than we've been paying. We need to be ready to spend the appropriate amount of investment because if we don't we only defer this problem for the next generation."




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