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Paying A Fair Rate. Notice Regarding New WATER & SEWER RATES  Council Meetings (Open Session) June 18, 2007 – Special Meeting June 18, 2007 – Special.

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Presentation on theme: "Paying A Fair Rate. Notice Regarding New WATER & SEWER RATES  Council Meetings (Open Session) June 18, 2007 – Special Meeting June 18, 2007 – Special."— Presentation transcript:

1 Paying A Fair Rate

2 Notice Regarding New WATER & SEWER RATES  Council Meetings (Open Session) June 18, 2007 – Special Meeting June 18, 2007 – Special Meeting August 13, 2007 August 13, 2007 September 10, 2007 September 10, 2007 November 13, 2007 November 13, 2007  Several articles in the Glengarry News  Advertisements November 2, 2007 – Standard Freeholder November 2, 2007 – Standard Freeholder November 7, 2007 – Glengarry News November 7, 2007 – Glengarry News  Today’s Meeting – February 11, 2008

3 Flyer OWNERS and TENANTS  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$  Flat Rate Service Fee0  Rate for water.8445  Rate for sewage.6335  Minimum consumption Total/Year$

4  Flat Rate Service Fee0  Rate for water  Rate for sewage  Minimum consumption Total/Year$ CORRECTIONS OWNERS and TENANTS  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption Total/Year$

5  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Glen Walter$  Flat Rate Service Fee0  Rate for water  Rate for sewage  Minimum consumption Total/Year$ CORRECTIONS OWNERS and TENANTS

6 HOW DO WE COMPARE? HOW DO WE COMPARE?

7 “Mr. Sitland (Pembrooke Operations Manager) said in a survey of 80 municipalities, the average rate as of 2006 was $756 per year” - The Daily Observer Adjusted to 2008 =$785

8 Flyer OWNERS and TENANTS  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Ont. Residential Avg.$  Flat Rate Service Fee0  Rate for water1.45  Rate for sewage1.09  Minimum consumption Total/Year$

9 City of Cornwall Water & Sewer Budget Presentation: BMA Study, 2007 Average Water & Sewer Bill: $700 Adjusted to 2008 =$718

10 Flyer OWNERS and TENANTS  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Ont. Residential Avg.$ Ont. Residential Avg.$  Flat Rate Service Fee0  Rate for water1.45  Rate for sewage1.09  Minimum consumption Total/Year$

11 In 2008 Edwardsburg Cardinal rates are again increasing from $460 per year to $500 per year. Adjusted to include capital =~$800 Water & Sewer Rates doubled in Cardinal in Pat Sayeau, Chairman - Finance & Administration “We could cover our operational costs and our debenture payments, but we couldn't cover our capital costs.” - Brockville Recorder

12 Flyer OWNERS and TENANTS  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Ont. Residential Avg.$ Ont. Residential Avg.$ $  Flat Rate Service Fee0  Rate for water1.45  Rate for sewage1.09  Minimum consumption Total/Year$

13 Flyer OWNERS and TENANTS  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Ont. Residential Avg.$ Ont. Residential Avg.$ $ Other Communities (2007) North Glengarry$ Bath$ Amherstview$ Odessa$  Flat Rate Service Fee0  Rate for water1.45  Rate for sewage1.09  Minimum consumption Total/Year$

14 Lancaster System IN DEBT Debt from Township Reserves

15 Lancaster System IN DEBT Debt from Township Reserves

16 Lancaster System IN DEBT Chart only includes debt from Township reserves Chart only includes debt from Township reserves Does not include 1998 debenture, paid in 2007 Does not include 1998 debenture, paid in 2007 Ironically, that debenture caused due to revenues not covering operating costs ($460,000) Ironically, that debenture caused due to revenues not covering operating costs ($460,000) Does not include the 1976 debenture, which will be paid in 2016 Does not include the 1976 debenture, which will be paid in 2016 Does not include the 2002 debenture, which will be paid in 2012 Does not include the 2002 debenture, which will be paid in 2012

17 Lancaster System IN DEBT If the entire debt from Township reserves were to be paid off today each user would be billed approximately $1000 If the entire debt from Township reserves were to be paid off today each user would be billed approximately $1000 Plan to pay off $315,000 Plan to pay off $315,000 Future impose fees Future impose fees May be paid off in 2019, earlier if growth exceeds expectations May be paid off in 2019, earlier if growth exceeds expectations Plan to pay off 2007 deficit of $120,000 Plan to pay off 2007 deficit of $120,000 Paid off with new rate increase Paid off with new rate increase May be paid off in 2010 at the earliest, longer if rates are lowered May be paid off in 2010 at the earliest, longer if rates are lowered One of two debentures paid off in 2012, the other in 2016 One of two debentures paid off in 2012, the other in 2016 Even with new rates it will be some time before the Lancaster system pays off its current debts from the Township reserves Even with new rates it will be some time before the Lancaster system pays off its current debts from the Township reserves

18 Rumours About WATER and SEWER RATES New rates necessary because of Cairnview Estates New rates necessary because of Cairnview Estates ½ of the $315,000 strategic investment was pre-paying impose fees from Cairnview. Without that the cost for water and sewer users in 2001 would have been significantly higher. Because of Cairnview, water and sewer rates will be LOWER ½ of the $315,000 strategic investment was pre-paying impose fees from Cairnview. Without that the cost for water and sewer users in 2001 would have been significantly higher. Because of Cairnview, water and sewer rates will be LOWER A bond from any developer doesn’t generate revenue for the Township, it guarantees payment. Anyone building in Cairnview will be required to connect to the Lancaster system and pay an impose fee which will reduce the $315,000 strategic investment A bond from any developer doesn’t generate revenue for the Township, it guarantees payment. Anyone building in Cairnview will be required to connect to the Lancaster system and pay an impose fee which will reduce the $315,000 strategic investment New rates necessary because of the repairs to the lagoon New rates necessary because of the repairs to the lagoon Rate increases were first proposed before Administration was even aware repairs were necessary to the lagoon Rate increases were first proposed before Administration was even aware repairs were necessary to the lagoon Lagoon repairs did not increase expenses for last year, it replaced other capital repairs Lagoon repairs did not increase expenses for last year, it replaced other capital repairs The new rate is not because the South Lancaster system cost more to build than expected. The new rates are to operate and maintain the system. The new rate is not because the South Lancaster system cost more to build than expected. The new rates are to operate and maintain the system.

19 Bill 175 (Sustainable Water and Sewer Systems Act) focuses on full cost recovery Cost recovery includes: Source Protection Operating costs Financing costs Renewal, replacement and improvement costs Extraction, treatment and distribution costs Other costs as prescribed by Province FOCUS on COST RECOVERY

20  Financial plans for systems required Lancaster System will be in a large deficit Lancaster System will be in a large deficit  PSAB Accounting Changes Lancaster System will be in a large deficit Lancaster System will be in a large deficit FOCUS on COST RECOVERY We are not recovering our costs in Lancaster

21 Water & Sewer Systems EFFICIENT OPERATIONS

22

23  Compared to all Ontario Townships in 2005 Wastewater- 25.0% more efficient Wastewater- 25.0% more efficient % more efficient when additional capital included Tap Water- 41.8% more efficient Tap Water- 41.8% more efficient % more efficient when additional capital included

24 Water & Sewer Systems EFFICIENT OPERATIONS  Everyone is prepared to pay their fair share  New rates only cover the cost to operate and maintain the systems  The system is not sustainable with the old rates Not sustainable in the short term Not sustainable in the short term Not sustainable for our children Not sustainable for our children

25 Water & Sewer Rates ALTERNATIVE BY-LAW  A Memo provided to Council with an alternative water & sewer rates by-law  Alternative by-law is not recommended by Administration  Alternative by-law would provide a cushion to the rates for the first year

26  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Ont. Residential Avg.$ Ont. Residential Avg.$ $ Minimum bill reduced by 16% From the new rates approved in 2007 Water & Sewer Rates ALTERNATIVE BY-LAW 2008 Rates (Alternative By-Law) 2008 Rates (2007 By-Law)

27  Flat Rate Service Fee  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Ont. Residential Avg.$ Ont. Residential Avg.$ $ Minimum bill reduced by 27% From the new rates approved in 2007 Water & Sewer Rates ALTERNATIVE BY-LAW 2008 Rates (Alternative By-Law) 2008 Rates (2007 By-Law)

28  Flat Rate Service Fee  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$  Flat Rate Service Fee170  Rate for water1.60  Rate for sewage1.20  Minimum consumption TOTAL PER YEAR$ Ont. Residential Avg.$ Ont. Residential Avg.$ $ Rates automatically adjusted to cover operating costs plus 10% Rate increases capped at 5% (Council approval required to exceed) Water & Sewer Rates ALTERNATIVE BY-LAW 2008 Rates (Alternative By-Law) 2008 Rates (2007 By-Law)

29 Water & Sewer Rates ALTERNATIVE BY-LAW  Lancaster system asset value (original pricing)$13,000,000  Consultant recommends 2% required for capital$260,000  2008 Lancaster Capital Budget$120,000  Difference between budget and requirement Government funding Government funding There will not be a lot of government funding availableThere will not be a lot of government funding available You can only get government funding for certain capital expenses – except for 2007 we haven’t had capital expenses for a number of yearsYou can only get government funding for certain capital expenses – except for 2007 we haven’t had capital expenses for a number of years Debt financing Debt financing Rate adjustments Rate adjustments

30  Lancaster Rates 2007$ $ New Rates$ New Rates$ Alternative$ Alternative$  ’08 Ont. Residential Av.~$  Lancaster Rates 2009~$681.00* 2009~$681.00* SUBJECT TO CAPITAL PLAN SUBJECT TO CAPITAL PLAN  Glen Walter Rates 2007$ $ New Rates$ New Rates$ Alternative$ Alternative$  ’08 Ont. Residential Av.~$  Glen Walter Rates 2009~$681.00* 2009~$681.00* SUBJECT TO CAPITAL PLAN SUBJECT TO CAPITAL PLAN Water & Sewer Rates ALTERNATIVE BY-LAW

31 Administration Does Not Support ALTERNATIVE BY-LAW  Although small, Lancaster will continue a deficit in 2008 ($8,000)  Although Lancaster rates increase in 2008 by 96%, Glen Walter Rates decrease by 4% How is that possible? Because Council has kept Lancaster rates as low as possible for as long as possible. And it is no longer sustainable. How is that possible? Because Council has kept Lancaster rates as low as possible for as long as possible. And it is no longer sustainable.  The 2008 rates are substantially lower than the Provincial average  The by-law as passed last year brings the rates closer in line with the Provincial average Administration continues to support the new rates as approved in 2007


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