Water revenue falls as Nanaimo citizens cut back use

NANAIMO – The city is seeing a drop in utility bills because of summertime conservation efforts.

The City of Nanaimo is running low on revenue for future water projects as residents ramp up conservation efforts.

Nanaimo residents have responded to this summer’s drought with a 15- to 20-per cent drop in normal summertime water use,  according to Bill Sims, the city’s manager of water resources.

It’s exactly what people have been asked to do under Level 2 water restrictions, but it also means lower-than-anticipated utility bills and a potential deficit.

A city staff report shows that a $929,300 deficit is expected in water user fees this year, with an estimated $670,000 directly linked to water restrictions.

It means less money is being channelled into reserves for future expansion and infrastructure renewal, and it’s a concern that needs to be addressed, said Sims.

“It’ll require some adjustment on the revenue side and some thinking … but really we are doing the right thing by conserving water and we’re doing the right thing by extending the life of our infrastructure,” he said.

Nanaimo residents are no stranger to water rate increases, which have gone to pay for new infrastructure like the water treatment plant. There was a 7.5-per cent increase Jan.1.

Lower user rates aren’t anticipated to affect operation and maintenance, and less dollars going into reserves is not an alarm in the short term, but if it continues, the city will have to think about user rates, says Deborah Duncan, the city’s manager of financial planning.

Sims raises the need to re-examine assumptions around extra water capacity, which the city originally projected would be needed in 2020. That target has been moving because of conservation efforts, but climate change remains a “wild card,” happening faster than first anticipated a decade ago, he said.

Mayor Bill McKay sees the reserves needed as a moving target, and wants to find out more about for what they are intended, but if it’s renewal of systems, like water pipes, the city is going to have to figure out alternatives. An option could be to keep levies at a certain level after the city has paid off short-term borrowing for the water treatment plant, in order to continue to pay for pipes.

Lantzville is also expected to come on stream, and that will add new users and “perhaps backstop some of that revenue loss,” McKay said.

Nanaimo News Bulletin

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