Staff Report: FEES AND CHARGES BYLAW NO. 958, 2016, AMENDMENT BYLAW NO. 1009, 2018
Recommendation to increase sewer user rates by 3% to meet the 2018-2022 Financial Plan revenue target.
TOWN OF VIEW ROYAL COUNCIL REPORT
TO: Council
DATE: August 29, 2018
FROM: Steven Vella, Manager of Accounting
MEETING DATE: September 4, 2018
FEES AND CHARGES BYLAW NO. 958, 2016, AMENDMENT BYLAW NO. 1009, 2018
RECOMMENDATION:
THAT Council approve a 3% increase in sewer user rates and that the Fees and Charges Bylaw No. 958, 2016, Amendment Bylaw No. 1009, 2018 be given first, second, and third readings.
CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:
I concur with the recommendation. for K. Anema
DIRECTOR OF ENGINEERING’S COMMENTS:
I concur with the recommendation.
DIRECTOR OF CORPORATE SERVICES’ COMMENTS:
I concur with the recommendation.
PURPOSE OF REPORT:
To consider an amendment to Fees and Charges Bylaw No. 958, 2016 to permit the collection of sewer user fees in accordance with the 2018-2022 Financial Plan revenue target and to outline the subsequent impact to property owners.
TIME CRITICAL:
The amending bylaw must receive final reading and adoption prior to mailing the 2018 sewer user fee invoices. If the first three readings are completed at the September 4, 2018 Council meeting, adoption can occur at the September 25, 2018 Council meeting, with invoices mailed early October. Property owners will have until November 30, 2018, to pay the invoiced amount, with any balance remaining at December 31, 2018, transferred to taxes in arrears.
BACKGROUND/DISCUSSION:
Per Community Charter Section 194(4), Council may, by bylaw impose a fee payable in respect of a municipal service. The municipality must make available to the public, on request, a report respecting how a fee imposed under this section was determined.
The 2018-2022 Financial Plan established a sewer user fee revenue target for 2018 of $830,000. Sewer user fee rates are calculated so that 15% of the total revenue is collected through a flat rate per single family dwelling equivalent (SFE) and the remaining 85% through a cubic metre volumetric rate based on the water consumption from the preceding October to April period (inclusive).
The total billable water consumption for the period October 2017 to April 2018 is 445,090 m³ and the total number of single family equivalents is 5,981. Analysis shows that water consumption has decreased by 4.2% while the total SFE increased 1%. In order to meet the sewer user fee revenue budget, rates need to increase by approximately 3%.
The following table shows the sewer user fee for the typical single family property owner from 2015 to 2017, with the 2018 projection based on a 3% rate increase.
| Sanitary Sewer user fee | 2015 $ | 2016 $ | 2017 $ | Proposed 2018 $ | Change $ | Change % |
|---|---|---|---|---|---|---|
| Flat rate | 20.98 | 20.47 | 20.47 | 21.08 | +0.61 | +3.0 |
| Per cubic meter | 1.52 | 1.54 | 1.54 | 1.59 | +0.05 | +3.2 |
| Total per SFE (based on average consumption) | 163.19 | 164.77 | 159.84 | 160.73 | +.89 | +.5% |
| Total revenue | 788,402 | 793,451 | 836,546 | 833,773 | -2,773 | -.3% |
An amendment to the Fees and Charges Bylaw (No. 958) Schedule A is required to update the rates. A draft bylaw is attached as Appendix A.
ALTERNATIVES:
Council may choose to increase sewer rates by 3%, keep rates at 2017 levels, or increase by some other amount, such as 2%. Below are summaries of each alternative rate structure.
3% rate increase (recommended)
| Consumption | Units | |
|---|---|---|
| Total | 445,090 | 5,981 |
| Rate | $1.59 | $21.08 |
| Revenue | $707,693.10 | $126,079.48 |
| Projected revenue total | $833,772.58 | |
| Budget target | $830,000.00 | |
| Projected surplus/(deficit) | $3,772.58 |
2% rate increase
| Consumption | Units | |
|---|---|---|
| Total | 445,090 | 5,981 |
| Rate | $1.57 | $20.88 |
| Revenue | $698,791.30 | $124,883.28 |
| Projected revenue total | $823,674.58 | |
| Budget target | $830,000.00 | |
| Projected surplus/(deficit) | ($6,325.42) |
Zero increase
| Consumption | Units | |
|---|---|---|
| Total | 445,090 | 5,981 |
| Rate | $1.54 | $20.47 |
| Revenue | $685,438.60 | $122,431.07 |
| Projected revenue total | $807,869.67 | |
| Budget target | $830,000.00 | |
| Projected surplus/(deficit) | ($22,130.33) |
Staff recommends a 3% rate increase in order to meet the budgeted revenue requirement for 2018.
RECOMMENDATION:
THAT Council approve a 3% increase in sewer user rates and that the Fees and Charges Bylaw No. 958, 2016, Amendment Bylaw No. 1009, 2018 be given first, second, and third readings.
SUBMITTED BY:
S. Vella, Manager of Accounting
REVIEWED BY:
D. Christenson, Director of Finance
Document Images
(5)
