Norfolk ratepayers can expect higher water bills
Norfolk ratepayers can expect to pay more
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Norfolk County has been served with the tab — $17.1 million a year — for putting its water and wastewater treatment systems on a sustainable footing.
With reserve funds depleted, it could be a long, slow and expensive climb to that objective.
In a report to Norfolk council Tuesday, a consultant said the way forward could involve annual water and wastewater bill increases in the range of five per cent between 2021 and 2030. There are faster ways to get there but treasury staff warn some ratepayers would have trouble coping under these scenarios.
One of Mayor Kristal Chopp’s great concerns upon taking office in 2018 is the sorry state of the county’s reserves. In the area of water and wastewater, Norfolk is far from the ideal of sustainability.
“I’m surprised by the lack of reaction from my fellow council members,” Chopp said at the end of Tuesday’s presentation. “I’m sick to my stomach about the increases we could be presenting our ratepayers.”
Previous council’s depleted reserves as a way of balancing budgets while keeping annual tax increases politically palatable. This has collided with new policies from the province requiring municipalities to account for the true value of their infrastructure and what it really costs each year to maintain it in good order.
In a water and wastewater report prepared by Watson and Associates Economists – Norfolk’s first in five years – consultant Peter Simcisko said the combined asset value of the county’s water and wastewater treatment facilities is $716 million.
Keeping these assets in good working order while ensuring adequate capacity to accommodate growth will cost about $17.1 million a year, Simcisko said. Assuming a 5.3 per cent increase in rates for 2021, Watson and Associates says Norfolk would have a sum total of $7.6 million at its disposal for this purpose by the end of next year.
In a review of Watson and Associates’ findings, Norfolk financial analyst Tyler Wain says there are risks to a municipality when it doesn’t plan for the future.
“Without an adequate rate structure, necessary funding may not be present, and as a result, lead to higher debt burdens and potential service interruptions or – even worse – failures,” he said.
A 5.3 per cent annual increase in Norfolk water rates over the next 10 years translates into an annual monthly increase of about $5 on the typical residential water bill. The non-residential increase is about $11 a month while the increase for industrial customers and other large, non-residential users is about $170 a month.
The Watson and Associates report includes a scenario for fast-tracking the sustainability plan that includes imposing the required increases in 2021 and 2022. Staff, however, advise this would test a significant number of household budgets.
Tuesday’s presentation was the point of departure for further discussion. The public will have an opportunity to comment online from Oct. 19 to Nov. 13. Council plans to approve a final rate structure for 2021 Nov. 24.
At that point, said Simcoe Coun. Ian Rabbitts – chair of Norfolk’s budget committee — Norfolk council members will be in a position to share their thoughts on water issues and the path forward.
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