After some concern that they may be headed for a deficit in the Utility Fund in 2024, City administration is breathing a little easier these days.
At a regular council meeting last November, city manager Sharla Griffiths informed councillors the fund was trending toward a deficit, due mainly to a delay in a rate study application to the Public Utilities Board (PUB) seeking increased sewer and water rates.
The City requested the water rate review as a result of inflationary pressures. While the last review included a built-in inflation factor, it only covered a set number of years. After that time there was no mechanism for the City to increase rates further, Griffiths said, adding there were no increases in 2023 or 2024.
The City applied to the PUB in September 2023, anticipating they would have new rates in place by October 2024 in time for last quarter billing.
When that did not happen, with the capital budget mostly completed for the year, there was not much time to make adjustments to make up for the shortfall.
Now, as administration is finalizing the numbers for 2024, it appears the threat has passed.
“We did realize a couple of cost savings and so there’s not a threat of a deficit,” Griffiths said.
“We’re just evaluating how much of a surplus we have in our general fund and I believe we’re also in a small, a modest surplus for utility.”
Those numbers are yet to be finalized, audited and presented for council approval.
New water and sewer rates were approved mid-month this past December and were applied to the utility in the first quarter of 2025.
As of Jan. 1, the minimum quarterly charge for 5/8-inch standard household connection increased to $89.59 from the current $79.12, a 13.2 per cent rise. That minimum will rise further to $92.96 on July 1, and to $95.39 on Jan. 1, 2026.
Additionally, water and sewer used over the minimum will be billed at $3.44 per cubic metre instead of $3.04 per cubic metre, again, a 13.2 per cent increase. Those rates will increase to $3.59 and $3.67 per cubic metre on July 1, and Jan. 1, 2026, respectively.
The new rates will be reflected in the first quarter billing in April.
The new rate structure is for the short term, given the lagoon expansion project looming. Once construction costs are firmed up and operating estimates are determined, the City will ask for another rate review to ensure the utility is a strong position to finance the project.
Earlier this month city council gave first readings to a bylaw allowing for the borrowing of $4,692,500 to help finance the lagoon expansion to be repayed through utility surcharges. A further $4,692,500 will be borrowed for the project and paid back through taxation.
