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Tuesday, November 24, 2009

Water and wastewater rate increases

Last night council confirmed its decision to stick with its infrastructure plan for water and sewer initiated in 2004. That means that rates for water will increase by 8% and for sewer by 9%. For the average homeowner, this will result in an increase in your monthly bill by aproximately $5.13.

Some members attempted to reduce this amount to a 7% and 7.2% increase respectively, arguing that in times of high unemployment savings needed to be found. While I agree that we need to be mindful of the impact on residents' wallets, a savings of 85 pennies per month is symbolic at best, providing virtually no relief to the taxpayer while significantly increasing the city debt which ultimately has to be borne by the taxpayers and their children.

Why do we need to have such high rate increases?

We have an aging system, it's as simple as that. Some of our pipes are more than 100 years old. We need only to look back to Hallowe'en Day in 2007 for a stark reminder of our vulnerability with respect to infrastructure. On that morning, a watermain burst on Wellington Street resulting in power outages, lost business, and traffic disruptions for weeks to come. It was not a pretty picture. For more detail on what happened that day go to this story at LondonTopic.

We have a significant investment in our infrastructure: $1.8 billion in water and $3.6 billion in wastewater. To protect that investment, we have to maintain and replace it as needed. For too long we have taken our infrastructure for granted so that now we are playing catch up. That is why staff have prepared, and council has approved, a plan to invest aggressively until we have eliminated the current infrastructure deficit estimated at more than half a billion dollars. Once we have caught up in 2015 for water and 2011 for wastewater, we can go back to rate increases that simply keep place with inflation.

Can anything be done to assist the rate payer?

There is something, however, that we can do to assist the residential rate payer. It has been acknowledged that the allocation of costs of our water and sewer service and infrastructure maintenance has been unfair to the residential customer. For many years, homeowners have subsidized the industrial, commercial and institutional (ICI) sectors. Two years ago, staff brought forward a recommendation which would have allocated these charges much more fairly and resulted in a significant rate reduction in the homeowners monthly bill. Instead, at the behest of the mayor and deputy mayor, and supported by the very same council members who today are bemoaning the impact of the rate increases on the beleaguered taxpayer, the recommendation to play fair with the residential rate payer was rejected and subsidies to the business, industry and institutions continue. Council was given a second opportunity to level the playing field last year, and again the same members said no. There will be another opportunity this summer, an election year. Will council finally listen to the concerns of the residential rate payer?

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