Only three members of the public stood up to have their voices heard at the Public Utilities Board (PUB) public hearing on Thompson's revised rate application for 2017 to 2019, held Jan. 23, attended by about 25 people apart from city staff and PUB representatives.
Chiew Chong was the only one of two presenters who had registered in advance to make a presentation, noting that he had collected 154 signatures from people concerned about the proposed rates, though the PUB has already granted the 2018 rates included in the application on an interim basis until their decision on this application is made, which should be within two months according to PUB member Irene Hamilton, who chaired the hearing.
"We are very concerned with the proposal as the city did not really spend the water and sewer revenue correctly from 2011 to present, the sum of which totals over $30 million and counting," said Chong. "The rate increase proposal will likely cause additional economic hardship to the city's taxpayers, especially considering the shutdown of the Birchtree Mine, the closure of the refinery and smelter. The job losses from these events are tremendous and even suggesting that a rate increase is feasible at this juncture is simply unacceptable."
Wayne Hall compared the current water and wastewater rates in Thompson to those in other Manitoba communities.
"The quarterly rate in Winnipeg is $45.90. The water rate per [cubic metre] is $1.78, the sewer rate per metre $2.55. In Brandon, the quarterly rate is $17.48, water $1.61 and sewer $1.35. Winkler is $17.65 for the quarterly rate, $2.02 per cubic meter and 95 [cents] for sewer per cubic metre. In Thompson, the [2017] quarterly rate is $79.35, per cubic metre for water is $1.46 and cubic metre for sewer is $1.66 Winnipeg's infrastructure is much, much older than ours, as is Brandon's and Winkler's. They have the expenses of maintaining their systems as we do. I just don't understand why there's such a difference in rates."
The 2017 to 2019 rate application seeks a quarterly minimum charge (which includes 14 cubic metres of water] of $135.61 in 2018 and water and wastewater rates of $2.39 per cubic metre and $1.28 per cubic metres respectively. If approved, the 2019 rates would be a minimum of $148.88 per quarter and $2.92 per cubic metre of water and $1.17 per cubic metre of wastewater. (Water and wastewater usage are always equal for billing purposes.)
Hamilton said the PUB has the authority to approve rate applications as they are, or to change the rates to be higher or lower.
Roy Perchaluk said the cost of water has gone up from about $600 or $700 a year in 2011 when water billing was introduced to about $1,300 per year now.
"I'm a little bit worried about the $1,500 we'll be paying in 2020 and that's just two retirees and I don’t know what the other people will do with two or three or four kids."
Prior to the comments from the public, Derek Ali from DFA International, consultants who were hired by the city to develop the rate study on which the proposal before the PUB was based, said there are a number of factors contributing to the rising rates in Thompson.
Ali said most of the pipes in the distribution system are cast iron or ductile iron, which usually lasts about 50 years, which means much of the system infrastructure is due for replacement. He also said that since water billing was introduced, consumption in Thompson has dropped dramatically, which does not necessarily lead to savings.
"As consumption goes down, costs tend to increase per cubic meter," he said, because the majority of costs are fixed.
If Thompson continues to replace water lines at the rate it has over the past couple of years, when it spent about $2 million per year on water utility capital projects, it will take 45 years to replace the whole system, and about 80 per cent of water main breaks occurring now, since pressure in the system was reduced from 58 pounds per square inch (psi) to 53 psi in late 2015, are as a result of ground movement. In response to comments received on the city's proposed rate structure, Ali said that freezing rates is not fiscally responsible, the replacement of the sewage treatment plant is not an option but a requirement by the province. He also said that no additional administrative staff have been hired for the water utility, only two water treatment plant operators, and that Vale receives preferential rates because they don't utilize the city's distribution and wastewater systems.
PUB member Michael Watson asked how the water loss rate of 42 per cent (the difference between the amount of potable water coming out of the water treatment plant and the amount that flows through customers' meters) referenced by Ali compared to the industry standard, which Ali said was about 25 per cent. Following the presentations by members of the public, Ali also said that comparing the prices of other water utilities is not as simple as it sounds.
"We always have to keep in mind that it's never always an apples to apples comparison," said Ali. "They do have different infrastructure than what you've got here therefore their costs drive their rates."
Ali also said that the $1.28 million surplus from 2016 and any surplus in 2017 and 2018 would be put into a reserve to help reduce the amount the city has to borrow for its share of the new sewage treatment plant construction costs, which is expected to be around $12 million. Prior to 2016, he said, the utility operated at a deficit in 2013, 2014 and 2015, with recovery of the deficit of nearly $300,000 from 2015 to be recovered via the city's proposed new rates.
Mayor Dennis Fenske closed by saying that having to construct a new sewage treatment plant at the same time as taking over the water treatment plant from Vale is a challenge for Thompson.
"That's significant in our current economic times," he said. "That is unique to Thompson. There is no place that I'm aware of in Manitoba, across Canada, where both of those events have happened in the same window of time."
* This story has been changed to correct a mistake in the headlIne, which originally said "lower water rates" rather than "higher water rates." The Thompson Citizen apologizes for the error.
