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Paying A Fair Rate

Paying A Fair Rate. Notice Regarding New WATER & SEWER RATES. Council Meetings (Open Session) June 18, 2007 – Special Meeting August 13, 2007 September 10, 2007 November 13, 2007 Several articles in the Glengarry News Advertisements November 2, 2007 – Standard Freeholder

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Paying A Fair Rate

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  1. Paying A Fair Rate

  2. Notice Regarding NewWATER & SEWER RATES • Council Meetings (Open Session) • June 18, 2007 – Special Meeting • August 13, 2007 • September 10, 2007 • November 13, 2007 • Several articles in the Glengarry News • Advertisements • November 2, 2007 – Standard Freeholder • November 7, 2007 – Glengarry News • Today’s Meeting – February 11, 2008

  3. FlyerOWNERS and TENANTS 2007 2008 • Flat Rate Service Fee 0 • Rate for water .8445 • Rate for sewage .6335 • Minimum consumption 147.80 Total/Year $295.60 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00

  4. CORRECTIONSOWNERS and TENANTS 2007 2008 • Flat Rate Service Fee 0 • Rate for water .8445 1.45 • Rate for sewage .6335 1.09 • Minimum consumption 147.80 Total/Year $295.60 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 Total/Year $790.00

  5. CORRECTIONSOWNERS and TENANTS 2007 2008 • Flat Rate Service Fee 0 • Rate for water .8445 1.45 • Rate for sewage .6335 1.09 • Minimum consumption 147.80 Total/Year $295.60 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 2007 Glen Walter $603.76

  6. HOW DO WE COMPARE?

  7. “Mr. Sitland (Pembrooke Operations Manager) said in a survey of 80 municipalities, the average rate as of 2006 was $756 per year” - The Daily Observer Adjusted to 2008 = $785

  8. FlyerOWNERS and TENANTS 2007 2008 • Flat Rate Service Fee 0 • Rate for water 1.45 • Rate for sewage 1.09 • Minimum consumption 147.80 Total/Year $295.60 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 Ont. Residential Avg. $785.00

  9. City of Cornwall Water & Sewer Budget Presentation: BMA Study, 2007 Average Water & Sewer Bill: $700 Adjusted to 2008 = $718

  10. FlyerOWNERS and TENANTS 2007 2008 • Flat Rate Service Fee 0 • Rate for water 1.45 • Rate for sewage 1.09 • Minimum consumption 147.80 Total/Year $295.60 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 Ont. Residential Avg. $785.00 Ont. Residential Avg. $718.00

  11. Water & Sewer Rates doubled in Cardinal in 2007. In 2008 Edwardsburg Cardinal rates are again increasing from $460 per year to $500 per year. Pat Sayeau, Chairman - Finance & Administration “We could cover our operational costs and our debenture payments, but we couldn't cover our capital costs.” - Brockville Recorder Adjusted to include capital = ~$800

  12. FlyerOWNERS and TENANTS 2007 2008 • Flat Rate Service Fee 0 • Rate for water 1.45 • Rate for sewage 1.09 • Minimum consumption 147.80 Total/Year $295.60 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 Ont. Residential Avg. $785.00 Ont. Residential Avg. $718.00 $800.00

  13. FlyerOWNERS and TENANTS 2007 2008 • Flat Rate Service Fee 0 • Rate for water 1.45 • Rate for sewage 1.09 • Minimum consumption 147.80 Total/Year $295.60 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 Ont. Residential Avg. $785.00 Ont. Residential Avg. $718.00 $800.00 Other Communities (2007) North Glengarry $871.50 Bath $717.96 Amherstview $485.64 Odessa $902.16

  14. Lancaster SystemIN DEBT Debt from Township Reserves

  15. Lancaster SystemIN DEBT Debt from Township Reserves

  16. Lancaster SystemIN DEBT • Chart only includes debt from Township reserves • Does not include 1998 debenture, paid in 2007 • Ironically, that debenture caused due to revenues not covering operating costs ($460,000) • Does not include the 1976 debenture, which will be paid in 2016 • Does not include the 2002 debenture, which will be paid in 2012

  17. Lancaster SystemIN DEBT • If the entire debt from Township reserves were to be paid off today each user would be billed approximately $1000 • Plan to pay off $315,000 • Future impose fees • May be paid off in 2019, earlier if growth exceeds expectations • Plan to pay off 2007 deficit of $120,000 • Paid off with new rate increase • May be paid off in 2010 at the earliest, longer if rates are lowered • One of two debentures paid off in 2012, the other in 2016 • Even with new rates it will be some time before the Lancaster system pays off its current debts from the Township reserves

  18. Rumours AboutWATER and SEWER RATES • New rates necessary because of Cairnview Estates • ½ of the $315,000 strategic investment was pre-paying impose fees from Cairnview. Without that the cost for water and sewer users in 2001 would have been significantly higher. Because of Cairnview, water and sewer rates will be LOWER • A bond from any developer doesn’t generate revenue for the Township, it guarantees payment. Anyone building in Cairnview will be required to connect to the Lancaster system and pay an impose fee which will reduce the $315,000 strategic investment • New rates necessary because of the repairs to the lagoon • Rate increases were first proposed before Administration was even aware repairs were necessary to the lagoon • Lagoon repairs did not increase expenses for last year, it replaced other capital repairs • The new rate is not because the South Lancaster system cost more to build than expected. The new rates are to operate and maintain the system.

  19. FOCUS on COST RECOVERY Bill 175 (Sustainable Water and Sewer Systems Act) focuses on full cost recovery Cost recovery includes: Source Protection Operating costs Financing costs Renewal, replacement and improvement costs Extraction, treatment and distribution costs Other costs as prescribed by Province

  20. FOCUS on COST RECOVERY • Financial plans for systems required • Lancaster System will be in a large deficit • PSAB Accounting Changes • Lancaster System will be in a large deficit We are not recovering our costs in Lancaster

  21. Water & Sewer SystemsEFFICIENT OPERATIONS

  22. Water & Sewer SystemsEFFICIENT OPERATIONS

  23. Water & Sewer SystemsEFFICIENT OPERATIONS • Compared to all Ontario Townships in 2005 • Wastewater - 25.0% more efficient - 11.2% more efficient when additional capital included • Tap Water - 41.8% more efficient - 31.1% more efficient when additional capital included

  24. Water & Sewer SystemsEFFICIENT OPERATIONS • Everyone is prepared to pay their fair share • New rates only cover the cost to operate and maintain the systems • The system is not sustainable with the old rates • Not sustainable in the short term • Not sustainable for our children

  25. Water & Sewer RatesALTERNATIVE BY-LAW • A Memo provided to Council with an alternative water & sewer rates by-law • Alternative by-law is not recommended by Administration • Alternative by-law would provide a cushion to the rates for the first year

  26. Water & Sewer RatesALTERNATIVE BY-LAW 2008 Rates (2007 By-Law) 2008 Rates (Alternative By-Law) • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 162.40 TOTAL PER YEAR $664.80 Ont. Residential Avg. $785.00 Ont. Residential Avg. $718.00 $800.00 Minimum bill reduced by 16% From the new rates approved in 2007

  27. Water & Sewer RatesALTERNATIVE BY-LAW 2008 Rates (2007 By-Law) 2008 Rates (Alternative By-Law) • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 • Flat Rate Service Fee 85 + 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 162.40 TOTAL PER YEAR $579.80 Ont. Residential Avg. $785.00 Ont. Residential Avg. $718.00 $800.00 Minimum bill reduced by 27% From the new rates approved in 2007

  28. Water & Sewer RatesALTERNATIVE BY-LAW 2008 Rates (2007 By-Law) 2008 Rates (Alternative By-Law) • Flat Rate Service Fee 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 225.00 TOTAL PER YEAR $790.00 • Flat Rate Service Fee 85 + 170 • Rate for water 1.60 • Rate for sewage 1.20 • Minimum consumption 162.40 TOTAL PER YEAR $579.80 Ont. Residential Avg. $785.00 Ont. Residential Avg. $718.00 $800.00 Rates automatically adjusted to cover operating costs plus 10% Rate increases capped at 5% (Council approval required to exceed)

  29. Water & Sewer RatesALTERNATIVE BY-LAW • Lancaster system asset value (original pricing) $13,000,000 • Consultant recommends 2% required for capital $260,000 • 2008 Lancaster Capital Budget $120,000 • Difference between budget and requirement • Government funding • There will not be a lot of government funding available • You can only get government funding for certain capital expenses – except for 2007 we haven’t had capital expenses for a number of years • Debt financing • Rate adjustments

  30. Water & Sewer RatesALTERNATIVE BY-LAW • Lancaster Rates • 2007 $295.60 • 2008 New Rates $790.00 • 2008 Alternative $579.80 • ’08 Ont. Residential Av. ~$750.00 • Lancaster Rates • 2009 ~$681.00* • SUBJECT TO CAPITAL PLAN • Glen Walter Rates • 2007 $603.76 • 2008 New Rates $790.00 • 2008 Alternative $579.80 • ’08 Ont. Residential Av. ~$750.00 • Glen Walter Rates • 2009 ~$681.00* • SUBJECT TO CAPITAL PLAN

  31. Administration Does Not SupportALTERNATIVE BY-LAW • Although small, Lancaster will continue a deficit in 2008 ($8,000) • Although Lancaster rates increase in 2008 by 96%, Glen Walter Rates decrease by 4% • How is that possible? Because Council has kept Lancaster rates as low as possible for as long as possible. And it is no longer sustainable. • The 2008 rates are substantially lower than the Provincial average • The by-law as passed last year brings the rates closer in line with the Provincial average Administration continues to support the new rates as approved in 2007

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