Volume 56 Number 38
Friday, September 23, 2016
Thompson, Manitoba
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Proposed rates for Thompson’s water and sewer utility were presented at a public hearing Sept. 20 in advance of the city submitting a three-year rate application to the Public Utilities Board by Oct. 31.
Average water costs will hold steady next year, rise 15 per cent in 2018 and 11 per cent in 2019 BY IAN GRAHAM EDITOR@THOMPSONCITIZEN.NET
The City of Thompson’s water and sewer utility rate application for 2017 to 2019 will see the average annual cost of water distribution and wastewater collection services increase about one per cent in the first year, 15 per cent in the second year and 11 per cent in the third year if the Public Utilities Board (PUB) approves it as is. The application was outlined at a public hearing at City Hall Sept. 20 with about 15 members of the public in attendance. The water and sewer rate application study was pre-
sented by Derek Ali of DFA Infrastructure International, who indicated that the annual cost for an average residential user would rise to about $1,280 in 2017 from $1,263 this year, then increase to about $1,468 in 2018 and $1,627 in 2019. The rates were calculated to include a $278,000 annual contribution to the water treatment plant reserve in the second and third years, to cover onethird of the annual estimated equipment replacement cost of $834,000 that will become the city’s responsibility once it takes ownership of the water treatment plant over from Vale in
2017. It is also based on the city’s assumption that it will be able to convince the provincial government not to make the city pay land transfer taxes of $137,500 and provincial sales tax of $1,189,000 on equipment included in the sale. The proposed rates, which are subject to approval and/or alteration by the PUB, do not include the cost of the city’s borrowing to pay its one-third share of construction costs for a new wastewater treatment plant, other than some interest costs in 2018 and 2019. Council is still considering how to finance the $12,166,167 the city will need to borrow for
that project, which is expected to be repaid at a rate of about $952,000 a year for 25 years. That cost will be borne through property taxes, a rate rider or a combination of the two. The city faces “a perfect storm,” said Mayor Dennis Fenske, taking over the water treatment plant and its associated costs from Vale at the same time that it has to help pay for a new sewage treatment plant. In addition, water consumption will have dropped about 30 per cent from 2012, when Thompson residents used 1,780,000 cubic metres, to where it is expected to bottom out
around 1,230,000 cubic metres in 2019. The city is also assuming that the number of customers, currently about 4,000, will drop by about 250 when Vale closes its smelter and refinery operations by the end of 2018. The transition of the water treatment plant from Vale to city ownership will result in new costs for the city’s water and sewer utility in 2017, when Vale will still own the plant and the city will pay 25 per cent of the costs of treating raw water. That will rise to 50 per cent in 2018, when the city assumes treatment plant ownership, and to
match the actual percentage of the treated water that is used to supply the city water system in 2019, which is currently estimated to be about 75 per cent. The city’s water and sewer utility is expected to use about 68 per cent of the treated water produced in 2017 and 2018. Vale will maintain ownership of the river pump house that supplies raw water to both its operations and the water treatment plant. The cost of supplying the city’s share of that water is expected to be about $50,000 in both Continued on Page 9
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