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The city is exploring options for a new approach to billing for water and sewer services in Ottawa after a revenue shortfall last year left a $22-million hole in the budget.
Drinking water, sanitary and stormwater services combined were to generate $318.5 million in revenue in 2014, but the forecast used by the city treasury to draft the 2015 budget earlier this year showed that the city collected $296.7 million — a shortfall of $21.8 million.
That came on the heels of a shortfall in 2013.
The impact of that lost revenue compounds, meaning the accumulation of more debt down the line. And that’s what has prompted the call for a new approach.
What’s the issue?
Ottawa, like other places in Ontario, has seen a decrease in water sales in recent years due to various conservation efforts — everything from changes to the provincial plumbing code for new construction and retrofitting existing homes to increasing environmental awareness and adoption of new gardening practices and water-efficient appliances.
Despite a growth in the number of households being serviced consumption has fallen 14 per cent between 2005 and 2014.
Put another way, water consumption levels today are roughly what they were in 1980.
Yet whether residents use a cubic metre of water or a hundred cubic metres, the cost of maintaining the pipe infrastructure and water treatment facilities is the same.
Reduced consumption means less revenue, which in turn means less money to maintain assets, some of which are more than 60 years old and need repair or replacement.
Under the city’s long-range financial plan, it planned to spend $2.7 billion on water and sewer projects between 2012 and 2022, with the vast majority of those dollars targeted for renewal projects.
How are water bills currently calculated?
The current rate structure is called uniform volumetric billing. Customers are charged a flat rate based on the volume of water consumed. Ottawa is one of only four of the 25 larger municipalities in Ontario that still relies on this billing model.
Bills are sent out every two months and include three charges: water charge, which averages $60 per household, sewer charge, which averages $70 per household, and a fire supply charge, which is typically $7 per bill (per household).
What are the options for a new rate structure?
There are several to consider.
A fixed charge plus tiered volumetric block — in other words, a base rate plus a variety of possible sliding scales based on how much a household uses — is most commonly used larger municipalities in Ontario. This would involve a combination of usage-dependent and usage-independent charges, with the fixed service charge varying by meter size.
A fixed charge plus uniform volumetic billing would keep part of the current billing structure, but add a base fee that all customers would pay.
Will it cost more?
Hard to say yet. According to deputy city treasurer Isabelle Jasmin, the point of the upcoming review is to look at the impact of the various rate structures. “We’ll look at all of them and understand what the impacts would be on a regular, average bill and at every level,” she said.
What’s next?
The environment committee will be asked next week to approve a review of the current structure.
Such a review would include a study of the effectiveness of the existing rate structures, a review of practices used across the province, industry best practice research, and development of a recommended new rate structure.
The city would also host public open houses in the fall to explain the various rate options studied and how they were evaluated before a final decision by council is made.
mpearson@ottawacitizen.com
twitter.com/mpearson78
查看原文...
Drinking water, sanitary and stormwater services combined were to generate $318.5 million in revenue in 2014, but the forecast used by the city treasury to draft the 2015 budget earlier this year showed that the city collected $296.7 million — a shortfall of $21.8 million.
That came on the heels of a shortfall in 2013.
The impact of that lost revenue compounds, meaning the accumulation of more debt down the line. And that’s what has prompted the call for a new approach.
What’s the issue?
Ottawa, like other places in Ontario, has seen a decrease in water sales in recent years due to various conservation efforts — everything from changes to the provincial plumbing code for new construction and retrofitting existing homes to increasing environmental awareness and adoption of new gardening practices and water-efficient appliances.
Despite a growth in the number of households being serviced consumption has fallen 14 per cent between 2005 and 2014.
Put another way, water consumption levels today are roughly what they were in 1980.
Yet whether residents use a cubic metre of water or a hundred cubic metres, the cost of maintaining the pipe infrastructure and water treatment facilities is the same.
Reduced consumption means less revenue, which in turn means less money to maintain assets, some of which are more than 60 years old and need repair or replacement.
Under the city’s long-range financial plan, it planned to spend $2.7 billion on water and sewer projects between 2012 and 2022, with the vast majority of those dollars targeted for renewal projects.
How are water bills currently calculated?
The current rate structure is called uniform volumetric billing. Customers are charged a flat rate based on the volume of water consumed. Ottawa is one of only four of the 25 larger municipalities in Ontario that still relies on this billing model.
Bills are sent out every two months and include three charges: water charge, which averages $60 per household, sewer charge, which averages $70 per household, and a fire supply charge, which is typically $7 per bill (per household).
What are the options for a new rate structure?
There are several to consider.
A fixed charge plus tiered volumetric block — in other words, a base rate plus a variety of possible sliding scales based on how much a household uses — is most commonly used larger municipalities in Ontario. This would involve a combination of usage-dependent and usage-independent charges, with the fixed service charge varying by meter size.
A fixed charge plus uniform volumetic billing would keep part of the current billing structure, but add a base fee that all customers would pay.
Will it cost more?
Hard to say yet. According to deputy city treasurer Isabelle Jasmin, the point of the upcoming review is to look at the impact of the various rate structures. “We’ll look at all of them and understand what the impacts would be on a regular, average bill and at every level,” she said.
What’s next?
The environment committee will be asked next week to approve a review of the current structure.
Such a review would include a study of the effectiveness of the existing rate structures, a review of practices used across the province, industry best practice research, and development of a recommended new rate structure.
The city would also host public open houses in the fall to explain the various rate options studied and how they were evaluated before a final decision by council is made.
mpearson@ottawacitizen.com
twitter.com/mpearson78
查看原文...
