What Should Abbotsford’s Sewer Rates Be?

By February 4, 2013Municipal Politics

By Henry Braun. Now that both Abbotsford and Mission Councils have agreed that our current water source capabilities will serve both communities for the next 15 – 20 years, based on actual data for the past 5 years, I began looking at our sewer utility and discovered some interesting facts as it relates to sewage volumes and cost of our sewage system.

Up until May of 2011, the Joint Abbotsford Mission Environmental Systems Wastewater Treatment (“JAMES”) plant processed sewage from the Aldergrove area of Langley Township via a sewer main at the Aldergrove/Abbotsford boundary. As a result of Aldergrove disconnecting from Abbotsford’s sewer system, the sewage volume at the JAMES plant between May and June, 2011, decreased by 12%. While this may not seem like a large decrease, it had a surprisingly large impact on the cost of processing one cubic metre (m3) of sewage. The sewer operating costs rose by 30% – from $0.51 per m3 in 2010 to $0.67 per m3 in 2011.

Residential sewage volumes are calculated to be 90% of the water volume measured by individual water meters. Against this calculated volume, the City applies the rates and fees established by the Consolidated Sewer Rates and Regulations Bylaw. For residents with water meters, the sewer rate in 2011 was $0.84 per m3 – this is 25% higher than our operating costs. For non-residential users, the Industrial, Commercial and Institutional (“ICI”) users, sewage volumes are also calculated at 90% of their metered water usage, although the larger ICI users have separate sewage meters.

The 2011 sewer rates were:

  • 1 – 10,000 m3 – $0.62/m3
  • 10,001 – 100,000 m3 – $0.57/m3
  • 100,001 + m3 – $0.49/m3

Interestingly, as a result of Aldergrove disconnecting from Abbotsford’s sewer system, all of the above ICI rates are now BELOW the $0.67/m3 processing costs. Since May/June of 2011, residential sewer users are subsidizing the ICI sector.

Recently, the Audit & Finance Committee unanimously agreed that the City cannot afford to process sewage at rates below cost. However, the increased ICI rates will be phased in over a 3 year period, which means that the residential users will continue to subsidize the ICI users by paying higher rates for 3 more years. Additionally, at the end of the 3 years, the ICI user rate per m3 will be capped at 90% of the residential rate.

The rational for lower ICI rates was explained this way at the November 13, 2012 Finance and Audit committee; “traditionally, rates were lower for industrial and commercial to encourage those businesses to locate in Abbotsford.” It would be interesting to know how many businesses located in Abbotsford because of lower ICI rates.

In my November 30, 2012 Blog entitled “What Should Our Water Rates Be”, a number of principles were listed that should be considered and applied to the sewer rates;

  • Every sewer user pays the same rate per m3.
  • Sewer rates must cover the cost of operating the system, including amortization (allows for capital replacement over the asset’s life).
  • A utility is supposed to operate on a break-even basis. Therefore, the Sewer Fund should not be generating a $1.6 million surplus (2011), UNLESS specifically approved by Council for an identifiable project(s).
  • A uniform sewer rate should be based on affordable and sustainable budgets and capital plans…which should eliminate annual rate increases of 40% (as in 2008). The City needs proper long-term financial planning which is affordable and sustainable.

Sewer rates increased by 95% since 2008 and are scheduled to rise by an additional 5% per year for each of the next 5 years. These are significant rate increases that are inconsistent with the rate of inflation and out of touch with the current state of our local economy.

This is an area that needs further review in order to understand what is driving these significant operating increases.

Henry Braun is a first term councillor for the City of Abbotsford. He blogs regularly at henrybraun.ca.

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