HomeMy WebLinkAboutINS-16-073 - Water & Wastewater User Rate Study Workshop
REPORT TO: Council
DATE OF MEETING: August 29, 2016
SUBMITTED BY: Cynthia Fletcher, Interim Executive Director (INS), 519-741-
2600 x4424
PREPARED BY: Matt Ryan, Interim Utilities Water Engineer, 519-741-2600
x4131
WARD(S) INVOLVED: All
DATE OF REPORT: August 22, 2016
REPORT NO.: INS-16-073
SUBJECT:City of Kitchener Water & Waste Water User Rate Study
Workshop
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RECOMMENDATION:
That the guiding principles of the Water & Waste Water Rate Design Study, be endorsed,
as outlined in Infrastructure Services Department report INS-16-073
BACKGROUND:
In 2015, staff identified for Council the need to establish an appropriate structure with respect to
water and sanitary sewer fixed rates and variable rates, as discretionary water consumption is
decreasing across the Region of Waterloo. The average annual consumption is dropping, yet
many of the costs are fixed regardless of consumption such as operation, maintenance and
capital replacement. In late 2015 the City of Kitchener retained the services of DFA
International to perform a cost of service analysis of the Water & Waste Water Systems and to
undertake a Rate Design Study.
Council has previously determined rate increases. The intent of the Rate Design Study is to
propose options for a rate structure which ensures all of our costs are fully recovered while
providing stable and adequate annual revenue to minimize the occurrence of annual deficits.
As work on the rate design continues, staff is seeking input from Council regarding guiding
principles for staff to follow in presenting future scenarios for blended rates and the
benefits/impacts of each proposal. The Water & Waste Water User Rate Study Workshop
discussion will center on the proposed guiding principles and potential rate options to be
considered in the Rates Design Study. At a future meeting of Council Committees, staff will
present scenarios for blended rates and the benefits/impacts of each.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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The Guiding Principles for the Rate Design Study
The water & sanitary rate structure will:
Ensure all costs are fully recovered through rates and charges
Provide stable and adequate annual revenue to minimize the occurrence of annual
deficits
Recover more revenue from those who use more water
Ensure to the extent possible that each customer class pays its fair share
Encourage reduction of discretionary water use
Ensure Rate calculations are transparent and easily explained to customers
REPORT:
Please see attached presentation.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Strategic Priority: Sustainable Environment and Infrastructure
Strategy: 4.5 Strengthen the capability and capacity within the organization to manage all of the
city’s assets so that they are affordable, dependable and sustainable in the long-term.
Strategic Action: CS22 Water & Sanitary Rate Structure Review
ALIGNMENT WITH CITY OF KITCHENER BUSINESS PLAN:
Stormwater & Sanitary Sewer Maintenance: Developing work plans that meet national
benchmarking requirements and best practices.
Water Utility: There is a backlog of approximately $63 million related to water pipeline
replacement developing over the next ten years. Increase distribution maintenance and water
meter replacements are required.
FINANCIAL IMPLICATIONS:
Work is underway. No additional funding is required to complete the Rate Deign Study
COMMUNITY ENGAGEMENT:
INFORM – This report has been posted to the City’s website with the agenda in advance of the
council / committee meeting.
ACKNOWLEDGED BY:
Cynthia Fletcher, Interim Executive Director, Infrastructure Services
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