Utility Rates 2017
Information Session
Agenda
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Water Utility Wastewater (Sewer) Utility
Electrical Utility
Proposed Rate increase
What is proposed?
2016
• 5% Water
• 5% Wastewater (sewer)
• 4% Electrical
Why is an increase for Utilities proposed?
• Lack of investment in past years – consistent with Municipalities across Canada….
• Old infrastructure which is overdue for replacement
• New infrastructure that requires ongoing maintenance
• Revenues available for operating expenses but are not sufficient to cover capital costs
• Lack of reserves – relatively low water & sewer rates compared to other municipalities with similar infrastructure
• In the past, difficult to convince councils to invest in infrastructure… “what you don’t see…..”
Water Revenue ‐ $5m
(2016 projected actual)
Domestic Rates
Irrigation Rates
Parcel Taxes
Other
Total
51%
10%
30%
9%
100%
Water Expenses ‐ $4.5m
(2016 projected actual)
Labour and Benefits
Contracted Services
Materials and Supplies
Debt Servicing
Other
Total
32%
8%
29%
30%
1%
100%
Water Utility
Revenue
$ 5,000,000
Expenses
4,500,000
Amount Left for Capital and Reserves
$ 500,000 “$500,000 for Capital and Reserves……”
Water Reserves projected balance at end of 2016 =$576,048
BUT, $582,931 required for District’s portion of the Trout Creek Reservoir Flume project leaving little reserve balance if all expenses are used.
Borrowing in water fund is more than $11,873,000.
Water
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220 km of water mains
6,000 water services
440 hydrants
11 dams
Water Treatment plant
13 PRV stations
9 pump stations
3 in‐ground storage tanks
Thirsk Dam Spillway
Thirsk Dam
Water Treatment Plant
Priority Capital Projects ‐ WATER
Garnet Valley Water Separation $ 6.6M project (Building Canada Grant ‐$2.2M District portion)
PRV 10 Upgrades
$180,000 project
Prairie Valley Road Valves Installation
Trout Creek Reservoir Flume $3.3m total project (Grant Application = $582,931 District portion)
Isintok Dam Safety review
$ 50,000
Garnett Dam Safety review
$ 60,000
Okanagan Lake Pump Station Design
$ 313,000
Pressure Reducing Valves (PRV) upgrades
$ 80,000
Isintok Dam Alarmed Remote Monitoring Design $ 60,000
Watermain Replacement program ‐ ongoing
2016 Capital Program =$1.03 million
Funds came from Build Canada grant, reserves and borrowing
Scenes and headlines like this are becoming increasingly common in North America…
Water
• Over 40 watermain/service breaks in 2016 in Summerland
• Watermain replacement = 220,000m / 80 years = 2,750m per year x $700/m = $1,925,000 per year
• Regulatory requirements may lead to upgrades
 Dam safety regulations  Canadian Drinking Water Guidelines changes
 WorksafeBC Regulation changes
Wastewater (Sewer) Revenue
$2.8 million projected for 2016, comprised of:
Domestic User Charges
Sewer Tax Levies
OBWB Grant
Other
Total
43%
28%
13%
16%
100%
Wastewater (Sewer) Expenses
$2.6 million projected for 2016, comprised of:
Labour and Benefits
Contracted Services
Materials and Supplies
Debt Servicing
Total
33%
7%
20%
40%
100%
Wastewater (sewer) Utility
Revenue
$ 2,800,000
Expenses
2,600,000
Amount Left for Capital and Reserves
$ 200,000 “$200,000 for Capital and Reserves……”
Projected total amount in Sewer Reserve at end of 2016 = $83,640 (after our portion Grit Removal project)
Wastewater (sewer)
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80 km of collection pipes
2,400 sanitary sewer services
Wastewater Treatment Plant
7 lift stations
Wastewater Treatment Plant
Lift Station Pumps
Wastewater (sewer)
Capital Projects 2017
Grit Removal and Effluent Filter $3.2m project
(District portion = $538,336)
Peach Orchard Lift Station Building $74,000
Centrifuge Major Overhaul
18,000
Engineered Air MUA model
60,000
Wastewater
• Wastewater collection pipe replacement = 80,000m / 80 years = 1,000m per year x $700/m = $700,000 per year
• Licence requirements may lead to more stringent treatment requirements  Ministry of Environment Regulation changes
 WorksafeBC Regulation changes
Electrical Revenue
$9.8 million projected for 2016, comprised of:
Residential Rates
Commercial Rates
Pole Rental & Street Lighting
Other
Total
53%
42%
3%
2%
100%
Electrical Expenses
$9.7 million projected for 2016, comprised of:
Labour and Benefits
Contracted Services
Materials and Supplies
Electric Supply (from Fortis)
Total
8%
3%
14%
75%
100%
Electric Utility
Revenue
$ 9,800,000
Expenses (including $500,000 transfer to general)
Amount Left for Capital and Reserves
9,700,000
$ 100,000 “$100,000 for Capital and Reserves……”
Electrical
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2 Substations
185 km of electrical conductor
3,923 power poles
1,446 transformers
1,364 street lights
Substation Maintenance
Transformer Replacement
Electrical
Capital Projects 2017
PCB Transformer Removal and Replacement $ 87,000
Bentley Road Conductor Upgrade
$ 273,000
Substation Switch Upgrade
$ 20,000
Meter Recertification
$ 35,000
Main Street Lane Upgrade
$ 40,000
Armstrong Upgrade – Substation to Wharton $ 500,000
Why is the Asset Management project so important??
History of Rate Increases
2012
2013
2014
2015
2016
Proposed 2017
Water
5%
0%
0%
5%
15%
5%
Sewer
3%
0%
5%
5%
15%
5%
Electrical
4%
4%
3% 3.34% 4.2%
4%
Utility Rates – Water 5% (overall) proposed increase for 2017
Residential
Current rates
Base
$33.57
2017 Proposed rates
$34.35
Commercial
Current rates
2017 Proposed rates
Base
$33.57
$34.35
Consumption
$0.37 per 1st 25 cubic metres
$1.40 per cubic metre thereafter $0.38 per 1st 25 cubic metres
$1.42 per cubic metre thereafter Consumption
$0.37 per cubic metre
$0.38 per cubic metre
*2016 increase was implemented June 1, 2016 (retroactive to January 1st) therefore 15% increase was collected over 7 months.
Utility Rates – Irrigation Water 5% proposed increase for 2017
15% increase was implemented in prior year.
Base fee for irrigator water up to a depth of 800mm per season (per hectare (1 acre)) Agricultural Water
Current rate
2017 Proposed rate
$166.62
$174.95
Greenhouses
Current rate
2017 Proposed rate
$359.75
$377.74
Groundwater
Current rate
2017 Proposed rate
$109.50
$114.98 Council recently passed a resolution delaying implementation of the tiered rate system for use over the 800mm threshold. The District will be reviewing the existing rate model, including the inclining block fee, which will be fully implemented in 2017. Utility Rates – Sewer 5% proposed increase for 2017
Per Unit User Fee (monthly)
Current rates
$31.05
2017 Proposed rates
$29.82
*Prior increase was implemented June 1, 2016 (retroactive to January 1st) therefore 15% increase was collected over 7 months.
Utility Rates – Electrical 4% proposed increase for 2017
Prior increase was effective June 1, 2016 therefore 4.2% increase was collected over 7 months.
Residential
Current rates
Base
$17.35
2017 Proposed rates
$17.62
Commercial
Current rates
2017 Proposed rates
Base
$21.27
$21.59
Consumption
$0.1126 per 1st 1,000 KWHs
$0.1238 per KWH thereafter
$0.1143 per 1st 1,000 KWHs
$0.1256 per KWH thereafter
Consumption
$0.1117 per KWH
$0.1143 per KWH
Costs for a Typical Residential Home
2016
2017
$ increase
Water
$514 /year $539 /year
$25/year
Sewer
$341 /year
$358 /year
$17/year
Electrical
$118 /month
$122 /month
$4/month
($48/year)
2016
Questions??