congratulated themselves for approving a “combined 0.03 per cent reduction in the Region’s Water and Wastewater budget, resulting in a net operating budget of $108 million.” A recent news release quoted the Regional Chair that, “These reduced budgets show that our Council is focused on affordability for Niagara residents.”
This upsets me. First, this misleads by telling only part of the story. Second, the facts show that the Region’s “zero budget guidance” did not focus water and wastewater affordability.
As you may recall, the Regional portion of your water and sewer rates pays for both the water and sewer treatment costs and delivery costs to 11 of Niagara’s Towns and Cities. The Region works with local staff to estimate the amount of water each municipality will sell to its residents and businesses and the amount of waste water it will send to the Region to treat.
Essentially, the Region wholesales water production and waste water treatment to the local municipalities. The local municipalities then add local distribution (water) and collection (sewer) costs to retail service to residents and businesses.
So, while a near zero budget change sounds good, it’s the impact on the customers (the 11 Cities & Towns) and, ultimately, residents and businesses, that really matters.
The Region charges 25% of their water budget to the local municipalities as a fixed cost; that portion of the bill is increasing by the 0.3%. But, what about the other portion? The Region will recover the remaining 75% at a set rate. Council increased that rate from $0.537 per cubic meter (m3) to $0.554 / m3; that’s a 3.2% increase!
What does that mean for local Cities? First, Cities will have to mitigate the Region’s 0.3% fixed-cost increase on the fixed-cost portion of our water bills. Second, the 3.2% increase on the consumption portion of our bill means a huge uphill battle – we will need to recover nearly $970,000 of distribution savings / innovations or pass along the costs to consumers.
What about waste water? It’s a similar scenario. While the overall Regional sewer budget will decrease slightly (by 0.2%), the Region expects to treat 2.0% less waste water. This forces Niagara Cities to contend with 1.8% increases in the costs per unit treated! That will force Towns to pass along another $853,800!
Unfortunately, despite the rhetoric, these significant rate increases show that Regional Council failed to focus on water and waste water affordability for Niagara’s Cities & Towns and ultimately failed Niagara’s residents and businesses.