Earlier this year, Thorsby Council agreed to put the water utility on a self-supporting basis paid solely through user rates, rather than recovering costs for the $275,397 water utility deficit through taxation. It had merit—high users would pay more and lower users would pay less. However, the excellence of that merit escaped residents when their water rates skyrocketed from $1.60/cubic meter (cu m) to $6/cu m. This has left some residents struggling with double, even triple increases in their water utility bills, according to Mayor Rasch who concedes it was a, “poor decision on our part to hit the residents with 100 percent tax recovery.”
Councillor Beleshko requested that Council revisit the water rate increase and put forth two options for a solution. First, roll back the $6/cu m cost recovery charge to something more realistic. Second, consider a higher threshold for water consumption.
Bottom line, the deficit has to be paid—either through taxes or the water bill. Councillor Jardine said since the increase has already been made, he believes Municipal Affairs is indicating the Village is better off staying on the cost-recovery billing. Councillor Hart argued the Municipal Affairs’ Best Practice is to head for cost recovery. “Even if rates were lowered,” said Hart, “the difference would have to be made up by higher taxes.” He also believes it would be unfair for the lower water users to subsidize higher users.
“We agreed to $6/cu m; we’ve already bitten the bullet—why are we going back?” Beleshko replied, “Because of an ethical principle that the increase in a utility rate by 375% is unconscionable.”
A Council Workshop will be held October 7 to explore options, whether to raise the threshold or gradually phase in the cost recovery, and to discover what impact those options will have on the 2015 Budget. In looking for a way to soften the impact of the cost recovery, CAO Gariepy reminded Council that something will likely, “fall off the table” during budget considerations. No easy answers here. There will be no changes this year.