Water bills are expected to increase by 5.5 per cent January 1, so the average monthly bill will increase close to $7 to about $134.
In the spring, Mayor Dave Canfield said he'd like to hold future increases to about five per cent, but it wouldn't allow the city's water and sewer system to be sustainable. The city has been forced to increase its spending on repairs and maintenance, due to a shortfall, as part of a province-wide effort.
After five years of 10 per cent increases from 2012 to 2017, a lot of ratepayers haven't been in a good mood. The provincial orders stem from the e-coli breakout in Walkerton in 2000. That's when more than 2,300 people -- roughly half the community of 5,000 -- fell ill from contaminated drinking water. In the end, seven people died from the bacteria outbreak.
This year, the city's water and wastewater rates increased by 8 per cent for all residential and commercial consumers.
Instead of passing a resolution that called for increases of eight per cent and 5.5 per cent for 2018 and 2019, council agreed to split the increases, leaving the door open for revisiting the rates for 2019. By postponing the decision on 2019 until early 2018, the city was hoping they might get additional grants to help offset rate increases. Councillors were also hoping there would be fewer line breaks over the winter, or the cost to maintain the system remains the same.
However, if the city sees another winter like 2014, where there were many breaks and lots of expenses, then users may be forced to pay an increase of more than 5.5 per cent, especially if there's no help from federal or provincial grants.
Since it's a user-pay system, revenues from water bills aren't mixed in with general revenues for the city. Instead, the accounts are kept separate.
A consultant's report in 2015 estimated it would cost about $240 million to replace current assets, and the city had about $67.6 million in assets. The city's consultant said they would need to raise about $3.6 million a year to help cover the shortfall, which was about $2 million a year more than is currently collected. At that point, the city was collecting about $1.6 million a year through ratepayers.
Further, commercial users in the city were paying $24,487 compared with the northern Ontario average of $29,096. Industrial users in Kenora paid $233,039 compared with the northern average of $269,965.
Canfield, who has served on the executive for the Association of Municipalities of Ontario, says the association has looked at over 40 different proposals to cut down infrastructure deficits, and their suggestion to increase the HST by one per cent was the one that made the most sense.
Municipalities only get 9 cents per tax-dollar. For Kenora, the infrastructure deficit is a significant amount of money – roughly $4 million a year. However, all three party leaders have said no to the HST increase.
Mayor-elect Dan Reynard officially takes office Saturday.
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