User fees skyrocket as city struggles
By Annette Phillips
Local News - Kingston, one of Ontario’s oldest cities,
is also home to some of the country’s oldest sewer and
water pipes, so when federal and provincial governments
started getting out of the infrastructure financing business
in the late 1980s, the city suffered more than most.
One visible and harmful result of infrastructure decay
has been the deliberate dumping each year of millions
of litres of raw sewage into Lake Ontario and local rivers.
The city sends the foul fluid into local waterways, most
often during rainstorms, because the ancient sewer system
cannot handle heavy flows. The alternative is to allow
the sewage to back up into homes and businesses.
Federal industry minister Allan Rock announced two weeks
ago a $25-million boost to help the city upgrade its sewage
works. It was the first serious cash infusion in more
than a decade.
The province, which set up a new competitive funding
structure in 1999 through its SuperBuild initiative, said
at one time the city would receive $12 million in infrastructure
grants, but has delivered only about $800,000 so far.
About $40,000 was allocated to an environmental assessment
for sewer system upgrades. The rest was a recreation grant
that paid for new boards and glass at city arenas.
In 1997, in an effort to manage an infrastructure backlog
pegged at $270 million and growing, city council set Kingston
on the "Road to Recovery." Part of the plan
involved the introduction of a 10-year capital works strategy
and a commitment to an annual one-per-cent tax hike for
But the tax hike wasn’t nearly enough to maintain the
kilometres of underground sewer and water pipes.
That’s how Kingston also became one of the first Ontario
municipalities to take sewer and water charges off the
tax base and introduce a full cost recovery program that
is modelled after the city’s profit-making natural gas
While residents in the east and west ends of the city
had newer infrastructure, residents of the historical
city core, where the pipes were the worst, had no option
but to start paying the charges.
The first step was streamlining and evening out costs.
"Currently, there are 34 water and 24 sewer rate
codes with up to nine sub classes in each rate code, spread
across seven areas," Keech wrote in a report to council
in March 2000, kicking off the political debate over water
Adding to the confusion is that councillors from the
former suburban townships insisted that three separate
sets of rates be maintained so that township residents,
with their newer pipes, wouldn’t be subsidizing massive
overhauling of the city core’s antique infrastructure.
"The mess was mind boggling," Keech said.
In a year-long exercise, Keech and city council combined
as many rates as possible and introduced a combination
of user rates and user charges like water meter hookups
for residential customers.
The city also reconfigured impost fees and development
charges, user fees that pay for infrastructure needed
to service new growth.
Though impost charges and development fees went up, the
city removed some huge infrastructure projects - like
a new bridge across the Cataraqui River - from the list
of things those fees paid for.
At the end of the day, the city-owned utilities company
ended up with a set of complex rate calculations that
include capital projects, operating costs, major projects
and allow Utilities Kingston to predict for years ahead
how much rates will increase or decrease.
But the user fees have been enormous. In the first five
years, water and sewer rates have risen more than 60 per
Without a significant influx of cash from federal and
provincial governments, rates would increase another 60
per cent over the next five years, said Bert Meunier,
Kingston’s chief administrative officer.
The good news is that if the city-owned Utilities Kingston
is allowed to stick to its current schedule, the backlog
of rotting infrastructure that plagues the city centre
and keeps the municipality from spending its money on
other things will be mostly eliminated by 2008, Keech
"Five years from now, you will see a huge difference."
Garbage and parking, both services under city operations
commissioner Mark Segsworth, are other areas where Kingston
has moved to wholly or partially recover some, or all,
service costs through user rates.
Segsworth calls them "cost centres," meaning
all the costs and revenues are handled independently from
the general city finances.
Parking generates enough profit that the city has been
able to undertake capital upgrades at a faster pace than
it did before.
On the garbage front, council has decided that recycling
is good for everyone and should be funded through tax
Garbage, council decided, should be an individual charge
and next year the city will limit curbside garbage pickup
to one bag per week. A bag tag, which costs $2.50, will
be required for each additional bag.
Some see the bag tag as an unfair tax. But the city incurs
the cost of garbage pickup, plus the expense of trucking
its trash to a landfill site in Napanee.
Citizens there have been battling an expansion of the
private landfill site where the city’s garbage goes now
and if they are successful, Kingston could face the bigger
expense of finding a new place to dump its trash.
Segsworth’s department also oversees road repair, snowplowing,
transit and maintenance of the city’s fleet of vehicles.
Each of the services is working toward the cost centre
approach to service delivery, Segsworth said.
Some services may not be self-sustaining, but the cost
centre approach will result in a cost breakdown that lets
the city compare itself with other service providers,
The ultimate objective is to show the public that the
city is delivering services competitively, Segsworth said.
"Maybe that will help the [garbage] generator become
more accountable for what they generate," he said.