Frequently Asked Questions
White City Rate Change 2019
Why are rates changing?
In 2017, residents and council identified that there was an issue with how sewer consumption charges were being applied to water used for irrigation. Previously, the sewage usage fee charges $0.98 on 75% of the water consumed by the home, this did not consider large volumes of water used for irrigation purposes which then does not use the regular sewage system. The town used this opportunity to conduct a full water and sewer utility service review with the services of Randle Green Consulting.
The utility review produced three key points:
1. The town’s rates were more variable than other municipalities, and more variable than what the American Water Works Association (AWWA) recommends. The town should adjust fixed rates to ensure that all users connected to the system are equally sharing the costs of operating the water and sewer utility;
2. In 2018 the revenue collected by the utility did not meet the required amount to cover operating expenses and did not collect the appropriate reserves for the utility. The town needs to adjust rates to ensure enough revenue is received to cover expenses; and
3. The sewer usage charge was not accurately capturing water usage for home consumption versus irrigation consumption (watering lawn and gardens) and should be adjusted accordingly.
How will the utility changes affect my bill?
By raising the fixed water and sewer service charges, residents will see an increase, however, the town is also lowering the variable rates (the tier 1 and tier 2 charges) which means that the charge for usage will be reduced. The average user (a household that uses 15-25 cubic meters per month) will see an increase of approximately $18 per month to their utility bill.
What does it mean if the utility doesn’t take in the required revenue to cover expenses?
The town’s goal in relation to the utility is to operate it as a stand-alone utility where revenue collected from users of the system covers all the expenses (or costs) required to operate the utility and enough reserves are established for future system repair, maintenance and replacement. If the utility does not collect the required revenue then it must be subsidized through tax dollars, ultimately this burden falls to the resident in either scenario. The recommended best practice is for the utility to remain a self-sufficient and with no subsidization from taxes.
How did the town conduct the rate review?
The town used this opportunity to conduct a full water and sewer utility service review with the services of Randle Green Consulting.
The rate review looked at the town’s utility rates under the direction of the American Water Works Association’s (AWWA) guidelines for rate setting and operation of a utility. The goal of the review was to create a clear rate setting policy and to operate the utility as a separate business from the town. The AWWA recommends that a utility service is self-funded and that all fixed expenses are recouped through fixed charges to all consumers who are connected to the system. The AWWA also recommends that a utility reserve is established for future system repairs and maintenance.
The rate review took consumption data from 2017 and created a model to determine based on the number of connections, and the forecast new connections, a base service rate for water and sewer that would accurately match the fixed expenses and required reserve of the utility divided equally among all users connected to the service. By adjusting the base service charges, the variable rates for usage could be adjusted to match the actual cost of usage for water and sewer.
Why are rates for Wholesale, Commercial and Industrial users different?
Council directed that rates for wholesale, commercial and industrial users remain at the 2017 variable rate while adjusting the base service rate to the 2019 rate. These properties can be located outside the of the boundaries of town or have different usage patterns than a residential property. Council has directed administration to conduct a review of these rates separate from residential properties to determine appropriate rates.
Why does the town need a reserve for utility services?
The AWWA recommends that utilities set aside a reserve, like a personal savings account, to provide funds in case of required repairs or maintenance to the system. These reserves are also collected so that when the system, or portions of the system, need to be replaced the funds have already been collected and the municipality is not required to take out a loan or increase resident’s taxes.
By collecting the reserve now, the people who are using the system are paying for its depreciation and not burdening future tax payers.
Why are the water rates in White City higher than other municipalities in the region?
The town is aware that rates in White City are higher than other municipalities in the region. Emerald Park and Pilot Butte own and operate their own water treatment plants. The Town of Balgonie purchases water from Pilot Butte. White City’s water treatment plant is owned and operated by SaskWater and there is a contract in place that determines the fees and rates charged by SaskWater.
Why does the town contact services to SaskWater?
This was the result of a decision by council in 2003 to transfer the town’s risk and liability of providing safe drinking water to SaskWater. SaskWater is a provincial agency that has the expertise and knowledge to assure that the town’s water is safe to drink. The decision of council came after the Walkerton Water Crisis in 2000 where 7 people died and 2,300 became ill and the 2001 North Battleford Water Crisis where 700 people became sick from drinking contaminated municipal water. Walkerton’s compensation to victims totalled $72 million, while North Battleford’s compensation totaled $3.3 million. Using SaskWater’s expertise and recognized water treatment procedures/best practices, White City residents can be assured that their drinking water is monitored 24 hours a day and is safe to drink.
What is being done to address the issue of higher rates and water quality?
The town is currently in negotiations with SaskWater to determine what options are available to lower water costs, increase water quality and take advantage of provincial or federal grants to provide lower rates for residents in White City.