Last month, Council approved a 1.5% annual increase in water bills for Millbrook water customers for the next four years. Water rates have been a cause for concern since the launch of the new water plant facilities in 2015, which by law must cover all costs of water systems.
Last year, rates were frozen for 2021 to allow time for another rate review to identify possible ways to reduce rates, which were projected to rise by 2.25% for the following four years to make up for the shortfall caused by the freeze. The new study found conditions that allowed the rate to rise by 1.5%.
Water and wastewater bills consist of two components: a fixed charge and a variable charge based on usage. The fixed charge is usually substantially higher than the variable one, which limits the ability to reduce bills through conservation efforts.
The fixed charge is calculated to cover the cost of the infrastructure required to deliver the services, or the capital costs, while the usage component is designed to cover the operating costs. Think of it like a car: the base charge covers the car payments while the volume charge covers the gas and other operating expenses. Even if your car sits in the garage for a month or more, your payments continue. The township incurred roughly $50K per customer to build the water facilities. Base charges for residences totals about $100 a month. That’s a lot of car payments.
The report included a comparison of water rates in neighbouring municipalities. Our water rates fall in the middle range, but our wastewater rates are at the top, sitting $40 below those of Otonabee South Monaghan and more than double rates in Port Hope, Peterborough and Cobourg. Part of the explanation is geography. Municipalities whose effluent is discharged into a large body of water are held to a lower standard than those pouring their treated wastewater into smaller ones. Ours flows into Baxter Creek, so it must contain lower concentrations of pollutants than effluent from jurisdictions located along the shores of Lake Ontario. In other words, it has to be clean. Would anyone really want it to be otherwise? KG