Moose Jaw City Council voted in favour of a four per cent increase for waterwork utilities and a three per cent increase for sanitary sewer rates during budget deliberations on Monday night.

City administration proposed the increase that would amount to $4.58 per month more for utility customers or $54.96 annually. The difference of one per cent came down to the added cost of water from the Buffalo Pound Water Treatment Plant due to its plant renewal project. The increases are effective Feb. 1, 2023

The increase passed by a vote of 4-3 with councillors Dawn Luhning, Crystal Froese and Kim Robinson opposed. Coun. Heather Eby said it wasn't an easy decision, but there has to be a source of funding for infrastructure projects.

"That's the hard part I think for a lot of people is when they pay their water bill they forget that they aren't just paying for the water that drips out of their tap or that they use to wash their dishes or make iced tea. It is all of the infrastructure that goes along with it," Eby said.

City administration pointed to $86 million in capital renewal costs over the next five years and repayment obligations of over $30 million in borrowing for past infrastructure work.

According to the city, the average utility customer paid $71.58 per month for water, $57.37 for sanitary sewer and $8.33 per month for an infrastructure levy for cast iron watermain replacement for a total of $137.28 per month. In comparison, the City of Regina's average user pays $150.90 per month along with a storm drainage fee of $18.60 for an overall bill of $171.50 per month.

Director of Financial Services Brian Acker explained that the increase is small compared to other municipalities.

"You will note that the City of Regina recently announced that they would have 4.5 per cent rate increases for their water and wastewater in 2023 and four per cent in 2024. Again, they are in a very similar position to the City of Moose Jaw in terms of they get their water obviously from the same place as we do," Acker told city council.

The city also proposed an increase to the interest rate for the instalment payment plan from four per cent to seven per cent.

The instalment payment plan allows residents to have the city replace water and sewer services and pay it off in instalments.

The report to city council said the city's rates are low and below the interest rate that the city would earn if the funds were in the city's bank account and below the rates that banks would charge.

In 2021, about 54 per cent of property owners that had water and sewer work done elected to take part in the instalment payment program. The percentage was even higher in 2020 at 72 per cent. The city attributes the popularity of the program to the preferable rate the city gives compared to banks and the cast iron watermain replacement program.

Also in 2021, the city received $62,000 in interest earnings with the city financing over $1.5 million through the repayment program.

The city sets its interest rates at one to 1.5 per cent of the prime rate banks offer. In 2022, the prime lending rate was 2.45 per cent and the city charged four per cent. The current prime rate is 5.95 per cent, so city administration proposed seven per cent for 2023, which Acker believes the prime rate could hit by 2023.

The increase in the interest rate was approved unanimously by city council.