Title
9:30 a.m. Appointment - Utility Rate Model and 2027 Water and Wastewater Rate Approval
Proposed Motions
1. That the Water and Wastewater Utility Rate Model presentation be received for information, as presented.
2. That administration be directed to implement a 6.5% increase to water utility rates and a 6.5% increase to wastewater utility rates effective January 1, 2027.
Body
Recommendation by Administration
Administration supports the proposed motions.
Purpose
The purpose of this report is to present the Water and Wastewater Utility Rate Model update and obtain Council approval of the preferred utility rate scenario, including the implementation of the 2027 utility rate adjustments and future annual rate increases identified within the rate model.
Summary
The Water and Wastewater Utility Rate Study completed by Hemson Consulting recommends rate adjustments to support the long-term financial sustainability of the County's utility systems. The study assessed operating requirements, capital infrastructure needs, reserve funding requirements, and projected utility revenues to develop a sustainable long-term rate model.
Two rate scenarios have been developed for Council's consideration. Both scenarios include a 6.5% wastewater utility rate increase effective January 1, 2027, while the proposed water utility rate increase varies between 6.5% under Scenario 1 and 3.5% under Scenario 2. The model also establishes future annual rate increases beginning in 2027 to support ongoing utility operations, asset management objectives, and infrastructure renewal requirements.
Administration reviewed the financial impacts of both scenarios and recommends approval of Scenario 1, as it provides greater long-term rate stability, improves reserve sustainability, and better supports future utility infrastructure investment requirements.
The Water and Wastewater Utility Rate Model supports responsible long-term financial management by establishing a sustainable, user-pay funding approach for utility operations, infrastructure renewal, and reserve contributions. The proposed rate path aligns utility revenues with projected operating and capital requirements, helping to maintain service levels while reducing the risk of future rate volatility and funding shortfalls.
Alternative Option
That Council direct administration to implement a 3.5% increase to water utility rates and a 6.5% increase to wastewater utility rates effective January 1, 2027.
Strategic Plan:
Strategic Driver D: Sustainable Growth - We cultivate a vibrant economy so communities can thrive.
Financial Impact:
Cost: Variable based on utility consumption.
Source of Funding: 2027 Utility Rates