If recommendations from an outside consultant are approved, residents in Greater Sudbury will see an end to the 7.4 per cent annual hikes in their water and sewer rates.
The report from BMA Consulting recommends replacing the city's 10-year plan, which includes the 7.4 per cent increases, with a 20-year plan that includes 4.8 per cent increases.
The goal is to conform with Ontario laws requiring municipalities to shift the burden for maintaining and replacing water and sewer systems from all property taxpayers to individual users of the system. The city's current water license has to be renewed in 2020, and a new plan has to be filed by then.
It has to cover at least six years – to 2026 – but the previous plan covered 10 years, and the new one being proposed is twice that long.
“The recommended timeframe of the plan update is 20 years, through 2039 with annual rate increases of 4.8 per cent each year during that period,” the report says.
Greater Sudbury operates six water supply systems (Dowling, Falconbridge, Sudbury, Vermillion, Onaping/Levack and the Valley) and 13 sewer systems. Other than the one in Falconbridge, each sewer facility has one or more lift stations that pump the sewage through the system.
While the city has made progress in making it more sustainable, there is still a funding shortfall in the water system of $41.3 million a year, and $42.9 million in sewer. Reducing the annual increases to 4.8 per cent will mean it takes longer to get the system to pay for itself, but is recommended when “taking into consideration ratepayer affordability.”
One of the province's goals in shifting costs directly to consumers is to encourage conservation, and the BMA report shows that water consumption in Greater Sudbury has been declining as the rates have been increasing.
Since 2008, the amount of water residents use each year has dropped by more than two million cubic metres, from about 15.5 million to 13.4 million in 2018, or about two per cent. That's about one million cubic metres more than forecast, leading to regular revenue shortfalls – $870,000 in 2018 alone.
“Because many of the costs of operating water and wastewater plants are fixed, a decline in water consumption does not result in a commensurate reduction in the cost of service,” the BMA report says. “As such, reductions in consumption impact the water and wastewater rates and must be factored into future rate calculations.”
The finance and administration committee will deal with the report at its meeting June 4 at 4 p.m at Tom Davies Square. Read the full report here.
