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Nelson utility rates eyed for increase

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Nelson water and sewer rates will increase once again this year, to cover the cost of infrastructure improvements.

At its December 3 regular meeting, city council gave preliminary readings to a bylaw that would increase water rates by six per cent and bump up sewer rates by five per cent, the same percentage increases those utilities saw last year.

Council has set aside time at its December 17 committee of the whole meeting to hear public comment on the proposed increases, which together mean residential households will pay $902 for water and sewage in 2013, a $47 increase from last year.

City staff recently reviewed Nelson's water rate structure to provide insight into the viability of universal water metering for homes and businesses.

During that review, staff discovered the per cubic metre water rate metered businesses pay is disproportionately low and have proposed raising the rate by 20 cents, on top of the system-wide six per cent increase. Only the four commercial properties on water meters would be affected by that change.

The water and sewer rates charged for non-metered businesses is based on the number of fixtures (sinks, toilets, washing machines, etc.) in the building. Staff also reviewed that method of calculating the rate and concluded it was more fair than other options, such as charging based on the size of the building or the number of employees who work there.

However, chief financial officer Colin McClure said having more businesses on water meters would help the city evaluate the fairness of that system.

Some businesses have requested they be moved onto water meters, McClure said, but he suggested that could change once metered rates are increased.

"They may have thought they could get a better deal on a meter, but really their rate shouldn't change much," he said.

The city expects to move more commercial buildings to water metering in the coming years, depending on the availability of government funding to help out with the cost.

Implementing a universal water meter system in the city would cost $2.3 million, while installing meters for the industrial, commercial and institutional buildings would cost $625,025.

Councillor Donna Macdonald said she'd like to see universal water metering in the city.

"It's a more equitable system, but we have to make it work from City's point of view," she said.

Water meters allow customers to see exactly how much water they are use and pay a rate based on that usage.

But McClure said that won't necessarily result in lower utility bills because most of the utilities budget goes to fixed costs that need to be paid regardless of how much water is used.

"There aren't a lot of variable costs associated with getting water to homes," McClure said. "If people use less water, maybe we'd need less chlorination products and filters, but the cost to have somebody in charge of taking care of the [water treatment] facility will be the same whether there's one million cubic metres going through it, or 1.2 million."

McClure said that two-thirds of the utility budget is spent on capital expenses, like watermain replacements.

Ultimately, if people start using less water because of water meters, the per cubic metre rate would have to be increased to avoid revenue loss.

"There's many good reasons to conserve water, of course, but the caution here is that conservation under water metering isn't necessarily going to mean lower water bills," McClure said.

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