Filling the city’s various infrastructure spending gaps will take a series of difficult decisions by city council members, and on Tuesday night they voted to defer one such choice.
At issue is a staff recommendation to increase water/wastewater hikes by six per cent annually to ensure the service’s ongoing infrastructure degradation comes to an end within 15 years.
The staff recommendation echoes a BMA Management Consulting Inc. long-term financial plan review which pinpointed a $54.1-million annual funding shortfall between water and wastewater capital needs. It cited current ongoing rate increases of 4.8 per cent as being inadequate to fill the gap.
Six-per-cent hikes were recommended to fill the gap within 15 years.
During Tuesday night’s finance and administration committee meeting of city council, BMA Management Consulting Inc. president Jim Bruzzese said that continued annual increases of 4.8 per cent would fill the spending gap for 24 years, which he advised against.
“Over a 24-year period your infrastructure gap would grow quite substantially,” he said, adding that he recommends the 15-year timeframe at six-per-cent annual increases from a ratepayer affordability standpoint.
Another option the consultant calculated is 7.4-per-cent annual rate increases, which Bruzzese said would fill the funding gap within 10 years.
He also said that filling the gap in one year would require a 60-per-cent hike in water rates and 43-per-cent jump in wastewater rates.
"That's obviously not doable,” he said.
Mulling over the six-per-cent hike proposed, some city council members expressed unease with the idea.
“I’m really concerned about the times we’re going into and the potential impact that even a couple-hundred dollars on a household seems to have a material impact to some members of our community,” Ward 5 Coun. Mike Parent said.
A six-per-cent hike would add $95.8 to the average residential user’s water/wastewater bill in 2026 alone), with subsequent years finding them face gradually increasing annual hikes (ongoing six per cent hikes against a base which grows each year).
Increasing the annual hike to 7.4 per cent would tack another $23.53 onto the initial year.
Filling this and other infrastructure spending gaps are difficult, Ward 4 Coun. Pauline Fortin said.
“It’s mindblowing, and I don’t know how we go to the residents to fill that … lack of user fee and tax revenue coming in,” she said.
Fortin flagged last month’s revelation that Greater Sudbury’s degrading roads are underfunded by $77.8 million annually as being another troubling gap they’ve yet to resolve.
The water/wastewater spending gap didn’t come out of the blue, with a December 2023 municipal report citing an annual spending gap within a few million of the one BMA Management Consulting Inc. recently calculated.
Meeting chair and Ward 9 Coun. Deb McIntosh also reminded her colleagues that city council members approved annual water/wastewater rate increases of 7.4 per cent from 2016 to 2019 as part of a 10-year plan to fill the service’s infrastructure spending gap within 10 years.
McIntosh relayed that during the pandemic, “when we were looking to cut back on our increases,” city council members decided to increase the timeline to 20 years by lowering the annual rate increases by 4.8 per cent beginning in 2020.
Since that time, a report by city Finance co-ordinator Carlee Parisotto noted that inflation exceeded the rate increase on multiple occasions, which impacted operating cost. At the same time, total billable water consumption has declined by approximately 0.8 per cent annually.
This brings Greater Sudbury to the current situation in which, despite five years having passed, 4.8-per-cent annual increases won’t fill the gap for another 24 years.
Ward 6 Coun. René Lapierre introduced Tuesday’s successful deferral, which punts a decision on future water/wastewater rate increases to sometime in June.
“I’m not fond of the increase,” he said. “I’d like to work with staff to see if we can come up with an alternative to maybe have a decreased amount for a few years or phase it in differently.”
Also during Tuesday’s finance and administration committee meeting of city council, the city's elected officials approved their 2025 tax plan.
The annual tax plan implements the decisions made during budget deliberations, which capped off late last year with an overall tax levy jump of 4.8 per cent.
Factoring in variables, such as an education tax rate freeze and tax ratio adjustments, the end result was an overall residential tax levy increase of 4.4 per cent.
There’s more nuance behind that, with residential tax levy increases varying depending on area to reflect different firefighter services, from an average of 4.8 per cent within the former City of Sudbury down to 3.3 per cent in formerly unorganized areas.
Committee decisions are not considered ratified until city council as a whole votes on them during their regular meetings. The next city council meeting is on April 29.
Tyler Clarke covers city hall and political affairs for Sudbury.com.