Many residents approached me with concerns about their new water bill. They are unhappy about the very high flat fee GVW charges which is a disincentive to saving water.
I agree with their concerns.
While GVW’s policy is to recover costs through “user pay” in reality they are not doing so. The $78.12 flat fee ($312.48 annually) is basically a parcel tax as it is applied regardless of water use. Just to compare the magnitude of this tax consider Coldstream’s municipal tax on a $400,000 property at $784,76 annually. In fact, I received a complaint from a lot owner whose municipal tax almost equaled his water fee. He used no water.
Part of our water cost recovery is certainly not user pay, in fact, it is the most regressive form of taxation as it is applied to each property regardless of its value. This tax provides almost $8 million revenue to the water utility. Granted, there is a potential 80 cubic meters of water available for this price but many will not use all of the allowable volume.
There are fairer options available for covering the costs of the utility.
My preference would be ad-valorem taxation for financing infrastructure costs. The current cost of our borrowed funds ($35 million) is about $2.5 million annually. To cover this sum an approximate mil rate of 0.2 would be charged to the properties of water customers. A property worth $500,000 would be paying $100 annually.
An access fee of $25 per quarter ($100 annually) would cover administrative costs, such as meter reading and billing costs.
The rest of the budget should be collected through user pay. This would be a fairer user pay system.
A future article will tackle the fairness of the amount collected by GVW and the fairness of the current graduated block fees.
I agree with their concerns.
While GVW’s policy is to recover costs through “user pay” in reality they are not doing so. The $78.12 flat fee ($312.48 annually) is basically a parcel tax as it is applied regardless of water use. Just to compare the magnitude of this tax consider Coldstream’s municipal tax on a $400,000 property at $784,76 annually. In fact, I received a complaint from a lot owner whose municipal tax almost equaled his water fee. He used no water.
Part of our water cost recovery is certainly not user pay, in fact, it is the most regressive form of taxation as it is applied to each property regardless of its value. This tax provides almost $8 million revenue to the water utility. Granted, there is a potential 80 cubic meters of water available for this price but many will not use all of the allowable volume.
There are fairer options available for covering the costs of the utility.
My preference would be ad-valorem taxation for financing infrastructure costs. The current cost of our borrowed funds ($35 million) is about $2.5 million annually. To cover this sum an approximate mil rate of 0.2 would be charged to the properties of water customers. A property worth $500,000 would be paying $100 annually.
An access fee of $25 per quarter ($100 annually) would cover administrative costs, such as meter reading and billing costs.
The rest of the budget should be collected through user pay. This would be a fairer user pay system.
A future article will tackle the fairness of the amount collected by GVW and the fairness of the current graduated block fees.
*************************************
1 comment:
If a Grassroots movement could do Provincially what they did over the HST surely there must be some way to get through to the Fat Heads making these decisions (and voting for them) that it is plain wrong, wrong, wrong. We need to stop grumbling behind closed doors and do something about it!
Thanks for keeping us so well informed it must be very frustrating for you.
Post a Comment