Proposed utility rate structure scrutinized in Tofino

Tofino put a new utility rate structure in place that will last until the end of 2015 but the district is still working on a permanent system to launch in 2016.  

For the final two quarters of 2015, residential ratepayers will be charged a base rate of $34, and receive an allowance of 45 cubic meters of water, per quarter.

If a residence uses up its allowance in either quarter, that residence will be subject to a tiered rate system where they will be charged $1.20 for every cubic meter between 45-60 and $2.80 for every cubic meter above 60.

Seasonal rates have been removed from the residential sector.

The commercial, institutional, hotel/motel, strata and processing sectors will be charged a base rate of $21 per quarter with no allowance. Users in these sectors will be charged $1.70  per cubic metre in quarter 3 (summer rate) and $1.10 per cubic metre in quarter 4 (winter rate).

These users will not be subject to a tiered system.

Council agreed to this rate structure during a special meeting held on June 17 but will continue hashing out a long-term structure that will likely include higher base rate charges for all users.

A plan that would have seen a quarterly base rate of  $52 for residents and $40 for the other sectors—along with the tiered and seasonal rate systems outlined above—was discussed at a community meeting held on June 16, but the meeting’s audience clamoured against it and sent council back to the drawing board.

“What was really important for council was to see equity in the different customer classes so that the proportion of cost that should be borne by each customer class is what is indeed being paid,” Osborne said at the start of the June 16 meeting.

“So that, for example, residents are not subsidizing the commercial sector or vice versa.”

She said the district needs to collect enough revenue to operate its water system and also wanted to see water conservation incentives built into the rates.

She noted the residential class includes vacation rentals, bed and breakfasts, and home based businesses so water-conservation incentives were built into this class through the tiered water meter system.

“The capacity of the billing system is such that you can’t differentiate what water’s being used for once it goes through a connection; so the easiest way to accommodate higher water users is to use a tiered system where, at higher amounts of water, they would be paying more for it,” Osborne said.

Several audience members asked why residential users were the only ones being charged at tiered rates and why this conservation tool wouldn’t also apply to the commercial sector.

Osborne responded that the vast differences in the commercial sector’s ratepayers, from gift shops to resorts, made an equitable tiered system impossible.

Some audience members suggested removing the base rate altogether and asked why residents would be charged a higher base rate than the other sectors.

Osborne responded residents would be charged based on a cost of service analysis and that the residential sector’s roughly 660 users represent a higher administrative cost than, for example, the 29 users in the hotel/motel class.

She added the residential base rate included an allowance of 45 cubic metres while the other sectors would be charged for every cubic metre used.

“On average, the residential bills will go down but there are a few people at the low-use end of the spectrum whose bills will go up,” she said.

The audience’s largest and most unified complaint was that the 45 cubic meter allowance was too high.

Audience members pointed out that over half Tofino’s homes currently use less than 45 cubic metres per quarter meaning over 50 per cent of the residential ratepayers would be paying for more water than they’re using.

Some suggested that putting the allowance higher than the average consumption would render water conservation incentives moot because people would be inclined to use the entire 45 cubic metres they were being charged for.

The district’s manager of finance Nyla Attiana said lowering the base rate would mean raising the tiered rate charges, which would hit young families with higher bills because they use more water than homes with one or two people.

She suggested the average family uses about 45 cubic metres per quarter.

 â€œWhen those rates get too high, it starts to get troublesome for the families,” she said.

She noted a similar community meeting about Tofino’s utility rate structure held two years ago had more representation from families who felt they were paying too much.

“There was a big concern that they felt they were being penalized and that was quite a strong voice at that time; we’re hearing from the other side tonight, which is great,” she said.

“I think that we need a find an equilibrium so that it’s fair and not perceived to be discriminatory against anyone…When are you being discrimatory against families and when are you being discriminatory against households of one or two?”

The audience’s majority seemed content with a residential base rate being charged but remained opposed to that base rate being $52 per quarter for a 45 cubic metre allowance.

During June 17’s meeting, council agreed to investigate a lower base rate and lower allowance for residential ratepayers in the permanent utility rate structure it’s working on. 

Read more about Tofino’s ongoing utility rate review in this week’s Westerly News on newsstands Wednesday.

 

Andrew.bailey@westerlynews.ca