City tackles bills for water utility

Armstrong council is making recommendations in regards to pay structures for residential and commercial water billing as the city continues with its plan to install water meters.

City chief financial officer Terry Martens told council in a report that it is apparent the city needs to look at a different residential rate structure that would include both a fixed and variable charge.

“In addition, it is necessary to look at changing the commercial rate structure in order to implement a fixed charge that is currently lacking in the quarterly billing process,” wrote Martens.

Currently, Armstrong residential water users pay a flat rate of $145.20 per year along with an annual water parcel tax of $110 for a total of $255.20.

Under this current structure, the equivalent amount to the flat rate would still be charged under a water meter, but it would include consumption of up to 360 cubic meters (m3) per year which, according to Martens’ report, is the average family consumption. A resident would be charged in addition to the annual parcel tax and any additional consumption over 360 m3 would be billed extra on a two-tiered consumption basis.

Martens recommended a second option, where in addition to the annual parcel tax, an annual fixed charge of $37.27 would be billed in addition to the variable consumption charges based on a three-tiered system.

“Option two is designed so that all of the fixed fees including the parcel taxes would cover the city’s annual fixed water costs,” said Martens. “The variable charges are designed so that a household that uses the average of 360 m3 of water will still pay the same as the other two structures.”

For those households that use less than 360 m3, there would be a reduction which provides a financial incentive to conserve. For those that use more, higher rates for heavier users would have to be established.

Coun. Shirley Fowler pointed out Armstrong’s residential water rates are among the lowest in the region.

“Average family usage rates in Sicamous are $316.50, Lumby is $398.40 and Greater Vernon is $555.20, so we’re certainly well, well, well below the rates of other neighbouring communities,” said Fowler.

The current commercial structure consists of billing actual consumption at $0.36 per m3 every three months with no minimum or fixed charge. The problem, said Martens, is that numerous quarterly bills of only a few dollars are printed and mailed. The charges are not enough to cover the administration in preparing and mailing the bill, not to mention forcing businesses to process small bill payments at costs to them.

Martens also pointed out the current structure has no added incentive for commercial users to conserve water.

Martens proposed an alternate structure of a quarterly fixed charge of $9.32 regardless of consumption, and usage charges are then billed on a three-tier rate structure.

The city has approximately 130 commercial customers of which almost two-thirds use less than 100 m3 every three months. Under the new structure, businesses that use between 45 and 142 m3 every three months will see a reduction in water charges. Those that use less than 45 m3 will may more due to the fixed charge but the maximum amount they would pay is $37.28 per year.

And businesses that use more than 142m3 every three months will pay more due to additional tiers added to the rate structure.

Council voted unanimously in favour of both recommendations. If adopted, the residential rates would begin one year after meters are installed.

Commercial rates would become effective July 1, 2011 to allow time for commercial customers to become aware of the changes.

“Putting in water meters is no reason for the city to up the water rates,” said Fowler. “That’s not what the water meters are about. There’s a lot of misconception in the community that putting in water meters just gives us a timely opportunity to up the rates, and that’s not what the purpose of this is at all.”