Water and Wastewater Rate Study

The Town of Collingwood is undergoing a review of its water and wastewater user rates. The purpose is to evaluate and gather the appropriate data to provide an updated rate structure that will support the needs of the community. Water and wastewater are self-funded utilities, meaning that they are non-tax supported operations. While it seems freshwater is plentiful in our municipality, we still must be financially and environmentally responsible water users and not take our freshwater asset- The Georgian Bay- for granted.

Our goal of this study is to assess opportunities in our current rate structure to better serve our residents and our growing population, with these key items being considered:

• Fair costs across customer groups including residential, commercial and industrial
• Financial sustainability- the costs of the system fully support the needs of the system
• Water conservation incentives for residents
• Maintaining and replacing current infrastructure

The key points below provides some general background facts regarding the current status of the Town’s water and wastewater system:

• Nearly 75% of total rate revenue is generated from the fixed charge
• Ensures revenue security and stable cash flow, although, the high ratio limits what the end-user can save from water conservation efforts
• Strong fiscal standing to start 2019 in regards to water and wastewater reserves
• Advancement of the asset management program and developed a 10-year capital plan

RATE STRUCTURE REVIEW

During the rate review, multiple structures were considered and are summarized below:

RATE STRUCTURE ADJUSTMENTS PROPOSED

Key points:

1. Wastewater Rates: rates are to be reduced to reflect good fiscal standing of system. Maintain fiscal sustainability of operations over the long-term
2. Fixed vs. Variable Rate: Increase the variable rate cost recovery as an offset of reducing the fixed rate component – this would give users greater control of their water bill as the fixed portion of the bill is reduced (from approx. 75% fixed to approx. 60% fixed)
3. Consumption Charge: Humpback rate structure be applied to all system users (residential and non-residential) and summer surcharge is eliminated

The following tables show the proposed changes to the water and wastewater rates for the Town of Collingwood:

Below is a chart of the average-user consumption measured in cubic meters of water on a monthly basis:

The following information shows the costs associated with the new rate structure on the average residential household:

Below is a comparison for the new proposed structure and where Collingwood's rates would rank within our geographical area:

THE FUTURE

Beyond the 2020 rates, this is what you can expect in terms of cost per annum going forward.

Water:

• Fixed charge to increase at 1% per annum
• Variable Rate to increase at 3% per annum

Wastewater:

• Fixed charge to increase at 1% per annum
• Variable Rate to increase at 3.5% per annum

Cumulative Overall Impact (water + wastewater):

• Post 2020 adjustments translate to an average 2% increase per year for a typical residential user at 200 m³