After looking at the town’s general budget, Ladysmith council turned its attention to sewer and water funds last week.
City manager Ruth Malli presented the town’s 2012-16 financial plan for water and sewer during the Feb. 20 council meeting.
“We will be having other meetings,” she said. “We know council hasn’t finished all the projects.”
The money in the water fund and the water in the sewer fund have to remain separate.
“Revenues that come from water are used solely for water operations and capital, and the same with sewer,” said Malli. “Obviously, there is no profit involved. It’s a utility that we run, and all the revenues we get go to delivery.”
Projects are funded mainly from utility rates, parcel tax, grants and reserve funds. The town also uses development costs charges (DCCs) to fund infrastructure necessitated by new development.
The town’s main operating expenses for water and sewer include wages and benefits, contracted services and equipment use.
“We have an operating surplus,” said Malli. “That is always allocated to future projects. DCCs are for specific projects, so they can’t be used for any project; they can only be used for the project they were collected for.”
Water operating expenses are projected to remain fairly consistent, as they increase from $459,318 in 2011 to $482,970 in 2012.
Sewer operating expenses are projected to increase from $484,222 in 2011 to $625,300 in 2012, and the main factor for the increase is the trucking of sludge, which costs $115,000.
Approved water projects to be completed in 2012 include the Holland Creek crossing, Stocking Dam hydro generation and new chlorine disinfection. Ozonation and UV treatment to purify water that was originally budgeted for 2016 may possibly be brought forward sooner, noted Malli.
Revenue possibilities for the water fund include raising parcel taxes and utility rates.
Every dollar increase in parcel tax generates $3,486 in revenue for the town, explained Malli.
“You can see our options for revenue generation are quite limited,” she said.
Sewer projects to be completed in 2012 include the third phase of the wastewater treatment plant. The town received $5.2 million in Gas Tax funds to help with the upgrades, and work is expected to be done in 2012, 2013 and 2014, explained Malli. The town also tried to set aside $100,000 a year for filtration.
Once the secondary treatment is up and running, from 2014 on, the town’s sewer operating costs will increase “fairly substantially,” as the town’s engineers are telling them to budget for about $700,000 a year, explained John Manson, the director of infrastructure.
Revenue possibilities in sewer are the same as in water, and in this case, every dollar increase in parcel tax generates $3,516.
Budget discussions will continue. The preliminary budget can be found online at www.ladysmith.ca, and the budget will be discussed at council meetings between March 5 and May 14. The financial plan must be adopted by May 15.