Keeping this year’s water-rate increase at nine per rather than the 10 per cent recommended by city staff, is short-sighted and ill-conceived, say critics.
City council decided to keep election promises of a lower increase rather than put money away in a reserve fund for the rainy days that create the city’s water woes.
The nine-per-cent increase means that average households will pay $50 more for their water this year.
Following the massive sewage spills into the Ottawa River in 2007 the city has been under increased pressure to rehabilitate its aging water and wastewater infrastructure, especially because the province has ordered the city to report every litre of sewage it has spilled since then.
With last year’s record breaking rainfalls, Ottawa spilled more than one billion litres of sewage into the river from its 18 combined storm and sewage sewers.
The problem with combined sewers, four which include all of Centretown’s sewers, is that during heavy rains they exceed the capacity of the main sewer that runs to the treatment plant and overflow into the river.
The one-per-cent addition, proposed by city staff, to the water rate was intended to create a wastewater capital reserve fund that would reduce sewage spills by building overflow storage tanks along the combined sewers.
The increase would also have funded new staff to produce cost saving efficiencies for the city’s water department.
Gloucester-South Nepean Ward Coun. Steve Desroches was one of the 13 councillors that supported eliminating the reserve fund.
“We all want to improve water quality but we can’t do this at any or all costs. We need to send that message to the province,” says Desroches
Because of council’s decision to keep the increase at nine per cent, Ottawa rate payers will save $4 this year – but in return the city will miss out on close to $1.4 million in extra revenue.
The axed reserve fund would have collected $49.1 million to support long-term infrastructure projects that the city must complete in order to prove their sustainability to the province’s water regulator in order to receive an operating license.
The province cracked down on municipal water authorities after seven people died and 2,500 people became ill from their drinking water in Walkerton, Ont., in 2000.
The financial plan the city is working on is the requirement of the Municipal Drinking Water Licensing scheme and is due to the province July 1.
Municipalities must submit plans covering long-term financial requirements for their drinking water systems,.
Given the province’s strict regulatory requirements Dixon Weir, the city’s general manager of environmental services, says that infrastructure projects will have to be undertaken as mandated by the city’s six-year capital plan.
“Key driver of capital program is not as much about capacity but more about the age of infrastructure,” says Weir, who urged council to approve the reserve fund.
“To make the 2010 budget look good you would end up paying more in 2011 and 2012. The reserve fund would smooth capital expenditures out over the next six years,” says Weir.
If the province decides that council’s approved budget is unsustainable without the reserve fund it can send it back to the city for revision.
Alta Vista Ward Coun. Peter Hume, one of the eight councillors who supported the reserve fund, says getting rid of it for short-term gains is short-sighted.
“What we’re saying is, we’re not going to take the money from you today, but we better tell them that we’re gonna take more from you tomorrow,” says Hume.
The other aspect of the cuts is funding for staff to produce efficiencies. Council voted to reduce two of the 40 new full-time positions identified for this year.
Last year, council directed $2.3 million in cost savings in drinking water services and $3.3 million in savings in wastewater services.
Staff managed to find the directed savings in drinking water but there remains $2.7 million outstanding for waste water savings.
Kitchissippi Ward Coun. Christine Leadman says cutting staff that was supposed to increase council-directed efficiency is hypocritical.
“I don’t see the logic, we are basically cutting the legs out from under them. We directed staff to find efficiencies and then deny them the staff to achieve them,” says Leadman
In response to a public outcry over sewage overflows into the river, the municipal, provincial and federal governments established a $251.54-million Ottawa River Fund.
The fund will help support the city’s Ottawa River Action Plan that has targeted 17 projects between 2009-2013 to improve the health of the Ottawa River
Water consumption declined last year by 6.3 per cent and resulted in more than a $7-million deficit
Due to this significant shortfall in water revenues, the 2009 year end deficit will be financed by a reduced works in progress funding of existing capital projects.