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Elliot Lake looks at water hikes to offset infrastructure costs

Brand new Ad Hoc Budget Committee will look at user fees on Monday afternoon at city hall
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At the first meeting of the Elliot Lake 2020 Ad Hoc Budget Committee Monday afternoon at city hall, committee members will consider user fees designed to help pay for improvements to the city's aging infrastructure.

In their joint written report to City Council, observed,

"The city's user-pay system is a pricing approach based on the idea that the most efficient allocation of resources occurs when consumers pay the full cost of the goods they consume like water and wastewater services," said Elliot Lake CAO Daniel Gagnon and Director of Public Works Daryl Halloch in their joint written report to city council.

"Currently the city has a fixed rate when it comes to water/wastewater rates for residential, as opposed to meter rates like other municipalities, and metered for commercial/industrial consumers," they said.

Their proposal to council was based in part on a study recommending increases for water/wastewater rates from 2016 to 2020. The study by a Mississauga firm suggested an 8 per cent annual rate increase during that period, then an annual rate each year following, of 4.21 percent, starting in 2021.

The study surveyed 10 other northern Ontario municipalities and found that in 2015, Elliot Lake, Marathon, Timmins, North Bay, Schreiber and Greenstone all employed flat-rate residential water fees. At that time the residential water/wastewater annual residential rate in Elliot Lake was the lowest of all 11 communities surveyed at $564. The most expensive flat-rate community was Greenstone at $1437.72.

At the same time, the annual flat rate in Marathon was $617. In Timmins, it was $835.42 and in North Bay, $922.42. 

Corresponding average annual residential metered water/wastewater rates included Sault Ste. Marie at $795.60 and Sudbury at $1023.17.

Since 2016, Elliott Lake has been applying a 7 per cent annual residential water/wastewater increase to build reserves necessary to fund Elliot Lake's 10-year road asset management plan (AMP). 

That's based on the capital requirement to replace underground infrastructure like the Valley/Hemlock project that began this year. 

As an example of the increased capital requirement, the water/wastewater portion of the Valley/Hemlock project was $1.5 M. In 2020 the city is planning the next road in the AMP, which is Pine/Poplar and the water/wastewater portion for that is proposed at $1.4 M.

Gagnon and Halloch said that without increasing the water/wastewater rates and building reserves these road projects cannot be funded.

The two senior staff members are recommending council opt for a continued 7 per cent water/wastewater annual rate increase.

"Applying an annual increase is a more fiscally responsible way to build the necessary capital reserves instead of funding projects by a major one-time increase at the time of infrastructure projects or emergency repairs," they said.

There are only a handful of other user fee additions proposed for 2020 including rental use of the Centennial Arena lobby, the Centennial Arena children's summer recreation program, theatre set up and hall rentals for licensed local events at Collins Hall plus after school city-sponsored pool programs, the children's paddling program at the beaches, and school summer children's programs and outings.

About the Author: Brent Sleightholm

As a reporter, Brent has covered everything from amateur and professional sports, to politics, entertainment, police and courts, to human interest stories and government issues
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