Fort St. John city council voted Monday to rescind this year's water rate increases, and waive late payment penalties on utility bills to help residents through the COVID-19 pandemic.
The 2020 water rates were approved in November, with rates increased from $1.65 to $1.77 per cubic metre.
Council held off rescinding 2020 sewer rate increases for now, which went from $1.69 to $1.81 this year, pending the outcome of water and sewer capital works currently out for bid.
“We’ll look at the water rate for now, we’re absolutely open to looking at the sewer rate as well,” Mayor Lori Ackerman. “Even having those projects available to us, and being able to move them forward in future years, will certainly help with our recovery process in the community."
Waiving late payment fees on both water and sewer utility bills is equivalent to a decrease of $159,000 in revenue, according to a report from David Joy, the city’s general manager of corporate services.
However, cutting sewer rates would have an immediate impact on the city’s utility reserve used to pay for upgrades to that system, Joy noted in the report.
There is currently $2.2 million in the sewer reserve, and $2.2 million is to be transferred to cover a planned $4.1 million in upgrades this year. Projects include the 100 Street rebuild, as well as lift station upgrades and lagoon repairs. With a rate cut, the spending would draw the reserve down to around $153,000.
However, “the sewer reserve will quickly recover during the years 2021 to 2024 with few major projects planned,” Joy noted.
The water reserve fund is not be materially affected by the rate cut.
There is currently $15.8 million in the water reserve, with $4 million of projects planned this year, including the 100 Street rebuild, a collector well study, and several upgrades at the high lift pump station.
“We are anticipating a need for significant financial investment in our sewer system over the next few years,” City Manager Dianne Hunter noted in the report.
“We will have to proceed cautiously with these investments should we reduce the sewer rate at this time, however it remains an option for Council to consider at this time, in recognition of the severe financial strain that many of our residents are facing.”
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