Great Lakes Article:

Water rates up 8.1 per cent
By Kevin Werner
Hamilton Mountain News
Published December 10th, 2004

Hamilton's water and sewer rates are going up, but not as much as previously thought.

City politicians are expected to approve this week a water and sewer rate increase of 8.1 per cent for 2005.

It will mean the average Hamilton homeowner will have to pay an extra $38 on his water and sewer bill, or about $516 per year.

Politicians are also expected to approve an across the board 2.5 per cent hike in user fees ranging from tasking the city to turning residents' water off and on, to higher fees for sewer permits and for any special water service agreements.

The higher rates will mean the 2005 water and wastewater budget will grow to about $134.8 million, about $8.4 million higher than in 2004.

About $63.4 million will go towards capital and debt financing, while about $69 million will be spent on programs and about $2 million will be earmarked to reserves.

"This is the fourth year in a row for rate increases," said Ancaster councillor Murray Ferguson. "I don't like it. But we are going in the right direction. If we didn't do it four years ago, we would not have the CSO (Combined Sewer Overflow) tanks built.

"We are working towards sustainability."

The rate increase is lower than what was expected even last year.

Councillors approved a 9.5 per cent rate increase for 2004. They were also warned that in 2006 and 2007, staff would proposed 9.5 per cent rate increases, then ask for hikes of 3 per cent in 2008, 2009 and 2010.

The strategy now, says Jim Harnum director of water and wastewater, is to proposed rate hikes of 7.50 per cent in 2006, 7 per cent in 2007, 6.85 per cent in 2008, 4.50 per cent in 2009 and 4 per cent in 2010.

"What we have done is taken the top of the triangle and flatten it out a bit," said Mr. Harnum. "We are actually stealing some from these years and trying to smooth it out a bit so it's not as harsh an adjustment for homeowners."

Mr. Harnum said during the number of open houses city staff recently held, residents complained about how quickly the city was raising water and sewer rates which was putting residents in a financial pinch.

"We heard them that they wanted to get this over with sooner rather than later, but they wanted to make sure we are using that money," said Mr. Harnum. "There has been a lot of pain. We have been raising the rates hard.

"But we don't want to just keep on raising the rates and building up the bank account. We want a sustainable amount of money at the end of that term."

The memory of the Locke Street flooding when a 76-year-old pipe burst early in 2003 remains fresh in public works' staff minds. Mr. Harnum pointed there are still about five to six pipe breaks a day during the cold weather months.

"We don't want to just realign the water mains without fixing the structural problems," he said.

Another reason for the lower rate increases is the city is discovering "efficiencies" in how it is financing its underground infrastructure replacement strategy.

"Over the last three years we have found about $7.2 million in the water and wastewater department," said Mr. Harnum. "As well, we are finding new financing options that are allowing us to reduce those projections."

In 2000, Hamilton politicians approved a 10 per cent water and sewer rate increase, then after amalgamation, under pressure from the city's public works department to fix Hamilton's aging sewer pipes, councillors approved rate hikes of 15 per cent, 12 per cent and 8.6 per cent over the next three years.

The goal in 2000, was to raise rates until the average homeowner's bill was about $800 by 2013.

The city's 10-year forecast includes a $1 billion capital budget strategy that includes spending $153 million on the Woodward Avenue Treatment Plant and $106 million on building a number of the combined sewer overflow tanks to prevent raw sewage from discharging into Lake Ontario during rain storms. The city is committed to the Bay Area Restoration Council's goal of protecting Hamilton Harbour's environment and getting the city off the International Joint Commission's "hot spot" contamination list.

To mitigate the effects of the rate hikes on vulnerable people, the city will provide about $350,000 for Ontario Works and Ontario Disability Support programs, while about $150,000 will be given to the Share the Warmth program that assists low income singles and couples with no children.