There could be some massive increase to water bills next year. A report to budget committee Wednesday night on water and sewer rates revealed a proposed 6% increase to utilities. That's not too bad considering we've seen increases as high as 15% but the kicker will be for commercial consumers of water if a new water infrastructure levy is approved.

There's a proposed water levy being discussed that could be worth an addition $24,000 per year for some of the largest users. In the spring of 2017, council passed a motion to transition the hospital levy into an infrastructure levy but instead of a flat $96 per year fee it was to be based on the size of your water meter. Residential customers would continue to see the $96 fee or about $8 per month, but the largest users would pay a whopping $2000 per month.

Finance Director Brian Acker says they just don't have enough money to do all the work that's needed.

"We have $120 million in capital projects over the next five years and that utility generates $11 million in revenue (per year)," explained Acker. "That's not a sufficient level of revenue to be able to fund and finance those projects so there's a need for significant increases, whether that's a levy or whether it's higher rate increases than the (proposed) 6%."

Many councillors seemed to have forgotten the motion they passed just over a year and a half ago. Following the defeat of the LIP funding model for cast iron replacement in the 2016 election, council was left with a major gap in their funding model. It was March of 2017 when they passed the motion to increase taxes an extra one or two per cent and direct that to the capital budget to help pay for the work. They also passed a motion that would transition the hospital levy into an infrastructure levy based on pipe size, once the hospital was paid off.

As Councillor Crystal Froese questioned why the increase was so massive for industrial users, some councillors tried to correct her and suggested she was interpreting the report incorrectly but when Acker confirmed that she was correct and the levy could be worth $24,000 a year for some users, there were audible gasps from some of the other elected officials and mumbling as they realized what their motion from 2017 could actually mean.

There are other options though as Acker explained that if council took away the portion of their motion that tied the rate increase to the size of the water user, there would be an across the board water levy of $131 per year. Another option is to increase water and sewer rates by 18% and then re-evaluate but the problem with that idea is that water rates are already expected to increase in the next several years as the Buffalo Pound Water Treatment Plant will likely increase their costs to supply water to the city as they prepare to embark on a complete refurbishment of their plant that could run over $200 million.

For now, councillors tabled the report to their next council meeting for further discussions.

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