Water rates in Irricana will increase 4.8 per cent this year, which residents could see translate into a $4.60 increase on their next bill.
At the March 18 meeting, council raised the water rates 23 cents to $2.90 per cubic metre from $2.67.
Irricana residents are billed bi-monthly for water, sewer and garbage.
The average household pays $157, and 495 bills are sent out including businesses, said Alvin Melton, the Town’s chief administrative officer. Currently, Irricana residents pay $2.67 per cubic metre of water.
The Town pays $2.76 per cubic metre to Aqua 7 for water and has been using taxpayer money to cover the nine cent difference.
“We’ve been paying nine cents per cubic metre on behalf of residents since last year, out of tax dollars,” Mayor Valerie Squires said, adding that amounted to a total of approximately $4,400 since July 2013.
“Taxpayers are subsidizing the big water users,” Melton said.
“The more water you’re using, the more you’re getting subsidized by the taxpayer.”
Irricana sources its water from The Town of Drumheller through the Aqua 7 Regional Water Commission, and a rate increase is expected for 2014.
Melton said the Town doesn’t know yet what Aqua 7’s rate increase will be this year. Aqua 7 was supposed to send out an increase in November. Melton said he doesn’t know when Aqua 7 will increase the Town’s water rate.
“According to our contract, they should have sent their increase in November, so we could budget for this year,” he said.
The rate Irricana charged to residents since July was lower than what it had been paying to Aqua 7, and the Town needed to recoup the $4,400 they lost. Going forward, Melton believes Aqua 7 will make its payment increase retroactive, which means the Town may need to recoup more.
The Town needs to pay for pipes and repairs along with the cost it pays to Aqua 7 for water delivery.
True cost accounting accounts for all external costs associated with water and wastewater infrastructure and operations. The true cost of water in Irricana should be $3.70 per cubic metre in order for the Town would break even.
At the March 18 meeting, Melton suggested an increased water rate of $3 to council, with an additional 10 per cent increase over the next seven years to ease into that true cost. Three dollars was an arbitrary number working towards true cost accounting, according to Melton.
“We wanted to get ahead of the game,” he said. “We had to set a rate and what we’re trying to do is set a rate close to true cost accounting.”
Councillor Laura Thiessen said she didn’t feel comfortable raising the water rate to $3 per cubic metre right now, as it would be too much too fast. Deputy Mayor Dennis Tracz agreed, saying he’d be in favour of increasing the rate incrementally over the next few years.
Thiessen made a motion to increase the water rate to $2.90 per cubic metre, to get incrementally closer to the true cost.
“Every time the water rate goes up, we’ll have to revisit the water bylaw,” she said.
Tracz made a motion to get to the true cost accounting within five years, saying it gives people who are using the water efficiently accountability, and those who abuse it some penalty.
In comparison with municipalities across Central Alberta, Irricana is in the middle when it comes to water rates, Melton said. In 2012, Aqua 7’s seven member municipalities were charged $3.33 per cubic metre as a consumption fee.
Though, there is a wide variety of prices residents pay, as some municipalities charge extra delivery fees or administrative fees. For example, Beiseker charges $4.27 per cubic metre and Linden charges $3.60 per cubic metre.
“Half pay more, half pay less than Irricana,” Melton said.
“I don’t know when they’ve charged the exact amount. When Aqua 7 was charging us $3.33 per cubic metre, we were charging residents $2.67.”
