Get ready to fork out more money for your water and wastewater in Chatham-Kent.
A Water and Wastewater Rates Study done for the Chatham-Kent Public Utilities Commission (CK PUC) shows the municipality needs to spend $1.2 billion on water and wastewater capital projects over the next 10 years to replace aging infrastructure and maintain existing infrastructure to accommodate moderate growth.
Large water users will see the steepest hike to fully recover the cost of operating the system without going into debt.
Total annual residential bills for water and wastewater users are proposed to nearly double to $1,156/yr (water) and $1,199/yr (wastewater) by 2034.
CK PUC heard at its regular monthly meeting on Thursday that the increases are required to fund the operating and capital expenditure forecast, while providing funds for reserves to prepare for future lifecycle requirements.
Councillor Lauren Anderson asked why the municipality didn't better prepare for the future and put more money into reserves.
"Did we not know that these things were on the lifecycling capital? Putting in for inflation now at six per cent... what were we doing before?" asked Anderson.
Chief Financial Officer Gordon Quinton admitted the municipality should have prepared better to handle rising inflation for future projects.
"On these capital items, the real rate (inflation) ended up being 20 per cent for multiple years in a row. And so, this is a lot of catchup now. The PUC has faced projects that were expected to be $10 million projects and now we're talking $40 million projects in some cases," Quinton answered.
The municipality has around $12 million in water reserves and roughly $38 million in wastewater reserves.
Anderson wants to cut back on the number of upcoming major water projects because the municipality simply can't afford all of the listed projects right now.
She also wants to send upper levels of government a letter asking for grant help or utility bills will keep going up without their help.
No grants are currently anticipated.
When asked by Councillor Anderson if "deeply" discounted water rates received by large water users over the last decade attracted large economic development to the municipality, CK PUC General Manager Darren Galbraith said not really, adding it will be difficult to accommodate any expansion of large water users now without the spending.
"How do we explain that to them? You got the deal and now that we need some more money we're going to increase your rates?" Anderson asked.
Quinton told the commission that if the proposed rates are approved by Council, Chatham-Kent will still have competitive water rates compared to the rest of the province.
A governance review of CK PUC was also approved by the commission. Mayor Darrin Canniff put the motion forward to review the composition of the board, saying it needs more expertise. He said that expertise is needed now more than ever because of the sky-rocketing costs of capital projects. If approved by Council, a consultant will be hired to conduct the review.