Council Agenda item Re: Sewer -- May 26, 2008

Recommendation to Council

Sewer: Funding for Upgrades, Sewer Rates, and Timely HookUps

· Report from the Director of Financial Administration, dated May 15, 2008

Recommendation

THAT the report from the Director of Financial Administration, dated May 15, 2008, regarding Sewer: Funding for Upgrades, Sewer Rates, and TimelyHookUps, be received;

AND THAT the District adopt a 50/50 policy for sewer upgrades, whereby 50% of the projected cost is built up in reserves, and 50% is borrowed at the time the project is commenced;

AND THAT in conjunction with the 50/50 financing policy, the quarterly residential sewer user rate be reduced from $142 to $126, commencing with the billing for the second quarter of 2008;

AND THAT customers fronting on sewer mains be required to hook up within five years and be charged the rate of $85 per quarter immediately upon sewer main completion, such rate to be adjusted in conjunction with rate changes to the fixed fee portion of the quarterly sewer charges;

AND THAT customers fronting on the Kalamalka Road sewer extension from McClounie Road to Mackie Drive be required to hook up by the end of December 2012 and be charged the rate of $85 per quarter commencing with the billing for the third quarter of 2008, such rate to be adjusted in conjunction with rate changes to the fixed fee portion of the quarterly sewer charges;

AND FURTHER THAT a bylaw be brought forward for Council’s consideration.

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The above recommendations will be in front of Council at the May 26th meeting.

Perhaps we should be grateful for small mercies and thank Council for their magnanimity of giving us some crumbs. They obviously examined my report of April 29 (see report) and found some merit in reducing the rate. However, the recommendations advanced to Council's approval is scandalous. Let's have a critical review of the recommendations by the Director of Financial Administration (DFA).

1. 50/50 policy for sewer upgrades.

It appears that the DFA recommends to Council the "rewarding" of the environmentally conscientious citizens of Coldstream, who paid for their sewer system and maintained it for 30 years, to continue paying and amass massive reserves for adding to and upgrading the system for the benefit of yet unknown customers.

I for one resent the notion that I should pay for future growth in advance. Note that neither the DFA nor five members of Council will be financially affected by this recommendation. The only residents affected are the ones already paying for sewer and those located along existing new sewer lines. None of the rest of the residents of Coldstream are paying for sewer and contributing to the proposed reserves. I believe this proposal is biased, ill conceived and punishes those who already bear a heavy burden for environmental protection.

I wish to direct the reader's attention to the fate of the last massive sewer reserve $665,000 of which was expropriated by the previous Council for the construction of a sewer trunk which benefited mostly one developer. Another $250,000 of the sewer operating reserve was expropriated by this Council for the purchase of latecomer fees from the same developer.

It is obvious that there is a danger in accumulating massive slush funds for future Councils who may misuse it for the benefit of favoured developer at the expense of taxpayers. The cavalier attitude of Councils removed about $500 from the pockets of each sewer user and then they are forced to refurbish those spent reserves.

2. Reduction of sewer rates from $142 to $126 a difference of $16 per quarter.

This is a good start but it again recommends the 50/50 policy. My calculations in the above report (see report) appears to have been accurate as the recommendation proposes half of the suggested rate cut ($48). I have the same objections her as above for the 50/50 principle. Council should cut the rate by $98 for 2008.

3. Five year hook up requirement and $85 per quarter fixed fee charge.

This proposal would be fair if residents along new sewer lines were consulted and consented to the projects in advance of those projects. However, bringing massive new costs to unsuspecting residents is at the peril of Council.

Another issues is the size of the fixed fee charge. I do not appreciate the DFA's attempts to "pad" the budget at the expense of the customers who actually pay her salary.

The figure on the left is the DFA's calculation of fixed fees, the amount that Coldstream expends on the maintenance and operation of the system within the District. On the right is my calculation after removing expenses that are not direct costs to Coldstream but are fees charged by the City of Vernon for the treatment and disposal of the sewage we send to them. As can be seen even with the addition of a reasonable sum for reserves ($82,275, about 25% of direct costs) the actual fixed fee should be $53 per quarter.

4. Council must convince residents along the new route that their decision is fair and equitable even though those residents did not consent to sewer service.

Council must be fair to ALL of their constituents!

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