On the heels of a "terrifying" infrastructure report that would have seen water and sewer utility rates could rise more than 50 per cent, District of Squamish (DOS) staff has decided to recommend a more conservative and gradual approach.
DOS engineering manager Brian Barnett on Tuesday (Feb. 22) said increasing water and sewer utility rates by 15 per cent in 2011 is a step in the right direction to address a funding shortfall related to future repairs and replacement of critical infrastructure.
"This means that water rates per household will go from $219 in 2010 to $252 in 2011 and sewer rates per household will go from $305 to $351," Barnett said. "Water is still under the benchmark and sewer is slightly over."
The sewer benchmark is somewhat deceiving because it compares sewer utilities to cities that only have primary treatment, such as Victoria, and the rare community that has tertiary treatment (a third and quite hygienic level of treatment) such as Whistler. Squamish has secondary treatment.
Those increases equate to a $79 increase in utility fees in 2011 because the third utility, garbage collection, will not increase.
The challenge is that the value of infrastructure in Squamish is $450 million and, in 50 years, the municipality needs to save that much money to replace the existing infrastructure.
To make that happen, water utility rates need to increase by 68 per cent, sewer utility rates need to rise by 58 per cent and property taxes need to increase by 12 per cent, according to the report presented to council on Feb. 15.
At that meeting, Barnett said that could take place immediately or gradually over the next four years. On Tuesday (Feb. 22), council decided 15 per cent was a better way to begin.
Coun. Paul Lalli immediately began looking for ways to reduce the increase.
"What about DCCs and grants?" he asked.
Barnett explained that while that might be possible, DCCs were designed to accommodate future growth, whereas the issue at hand was to have adequate infrastructure to deal with Squamish's current population.
Coun. Corinne Lonsdale pointed out that Squamish has already been raising utility rates with a 70 per cent increase in utility rates since 2006.
"We've been doing some upgrades. We just haven't been preparing for the future," she said, referring to the fact that so much of Squamish's infrastructure is nearing the end of its lifespan.
Joanne Greenlees, district general manager of financial services, agreed with Barnett and warned Lalli that reducing the 15 per cent would be irresponsible.
"I think it's prudent to do the 15 per cent now because we know we're going to need at least that," she said.
Coun. Rob Kirkham agreed.
"I think it's a good, gradated approach," he said.
"Right now we're behind and we'll be heading in the right direction, though we're still a long way away from addressing the situation."
Lonsdale said that despite her support for the increases, council should be mindful of the demographic that might be more severely impacted by paying $80 more.
"We should take a look at annual incomes compared with housing costs and service costs because they're going to be pretty big if we keep heading in this direction," she said.
"I know we have to figure this out but I think we have to really be aware to what it will mean to our existing residents and the sustainability of our town."
Ryan Kononoff, who recently purchased a home in Squamish, wasn't too concerned with the increase.
"As much as I like to negotiate and nickel and dime, I probably wouldn't get overly excited or concerned about the increase because it's fairly minimal when it's spread out over the year," he said.
"In my mind if the infrastructure's old and needs to be replaced, it needs to be replaced - clearly they didn't appropriately plan 10 years ago when they could have slowly been increasing the utility charge over the course of 10 years."
Kononoff said had the district realized beforehand, the increase could have been a lot more gradual and there would already be money put away for capital projects that need to be completed now.
"But realistically this amount isn't going to cause me to default on my mortgage," he added.
He said if other, more expensive bills jumped that quickly, there could be an issue.
"If there was an overnight 15 per cent increase on my hydro bill - say it was $100 a month - that would be a cause for concern."
