Ladysmith residents can expect an increase on sewer and water rates next year.
Town council is in the midst of a series of meetings that include discussion of the 2024 budget, and at a meeting on Nov. 7, council members heard a presentation from Erin Anderson, director of financial services, about the sewer and water tax rates, which will come into effect on Jan. 1.
Although the operations are funded from user fees, there are more costs this year due to a 2.5 per cent wage increase for CUPE employees, a change in operators of the waste water treatment plant and water filtration plant, and a general increase in local government expenses.
Sewer tax rates are expected to increase by three per cent, largely due to employment costs expected to increase by $100,000 for a total of $837,000. In total, the budgeted expenses are expected to be approximately $3.3 million, which is a 3.3 per cent increase from 2023.
Sewer parcel taxes will remain at $360 and will be expected to generate $1.4 million, which will fund debt payments, capital and reserve costs, and will partially offset operating costs. Total sewer rates are expected to bring in $1.8 million and the rest will be funded by permits, development cost charges and extended services and penalties.
The budget for waterworks will only increase by 1.6 per cent, however, to sustain operations there will be a five per cent increase in the tax rate as the current rate does not sustain daily operations and parcel tax funds, which should be used for capital projects, are being used for water utility operations.
“Because the water rates have been too low, we’re subsidizing [waterworks operations] from parcel tax revenues, which should be going to reserves for the bigger capital projects like the Holland Lake dam,” explained Mayor Aaron Stone. “Water and sewer, both separate utilities, must be non-profit budgets and self-sustaining so they’re separated from the general budgets from the town, so in some ways they’re more simple, but otherwise somewhat more restrictive.”
Water parcel taxes will also remain at $459 which will raise about $1.8 million in revenue.
Anderson and Stone agreed the town did not have adequate reserve levels, which is $175,000 in the water budget and $314,000 in the sewer budget.
“You have to run a tight ship in utilities but also have to be planning for future infrastructure costs,” said Stone. “And sometimes capital costs are higher than expected.”
Council unanimously passed the budget amendments. The next budget meeting will be on Tuesday, Nov. 21, to discuss general operations.Follow @Baileyseymour02