City Council has just spent two days doing a jigsaw puzzle. The theme of the puzzle — The City Budget.
In recent weeks, we’ve had presentations from our utilities, our operating departments, and community organizations that receive city funding. The time has come to begin fitting all the pieces together.
The frame of the puzzle is “a reasonable tax rate for the services the City provides.” All the puzzle pieces that have to fit inside that frame are services — police and fire protection, streets and sidewalks, sports and culture, planning, and on and on.
Can we get all the pieces to fit in the frame? Will some need to be shaved a bit? Do some no longer fit? Is everything there that should be? (Check the floor for missing pieces!) And in the end do we have the picture right — a safe, healthy, vibrant and affordable community?
In mid-February you’ll have the chance to check out our puzzling work, before the budget is finalized.
You may already have heard about utility rate increases (utilities have their own puzzle because they’re funded by fees, not by taxation). The decision to raise water and sewer rates by nine and seven per cent respectively shouldn’t be a surprise.
For the past couple years, we’ve been following our long-range financing strategy, a plan to upgrade our water and sewer infrastructure. The strategy projects this type of increase for the next eight or nine years, after which it should flatten out.
What was disappointing to me was that we didn’t make more progress on metering water consumption, especially for the commercial sector.
However, as I’ve learned, that issue is its own little puzzle! Water metering is a fair way to allocate costs, and often promotes conservation. But you have to get the rates right. To do that, you have to understand both the water system and its users.
Like garbage collection (where we pay a fixed fee to have the truck go by our homes and a fee for each bag of garbage), water rates have two parts. The fixed rate represents the overall infrastructure needed to deliver water (like the garbage truck) and the variable rate fluctuates with consumption (like garbage tags).
Staff estimates our variable costs at about 10 per cent of the total because we have a low-cost gravity system. So, simply metering consumption would be more equitable but may not save the conservation-minded homeowner or business much money.
We also have to understand the various user groups (commercial, residential, institutional), so we can ensure each sector pays its fair share. Finally, we have to ensure the revenue received is sufficient to keep the utility healthy.
Staff has done some research and analysis, assisted by the Columbia Basin Trust’s WaterSmart Initiative. Council has made this work a top priority and asked for a full report as soon as possible. That would enable us to consider a restructure of commercial rates in the short term, and provide an information base for further discussion about metering.
Aargh, give me a crossword puzzle any day!