“You have to understand that the utility board insists that we run a balanced budget and that we don’t run a deficit,” Swanson explained. “What we needed to do is start over and that is what we’ve done.”
The municipality had applied for a rate increase in the past, but Swanson said it did not occur and the application was withdrawn. This time they hired consultant Dale Lyle to work with them and they felt it was important they do it right, in large part because the utility has run up a $1 million deficit over the years, though approved by PUB, needs to be made up.
“In my opinion, the debenture that was taken out on the new water plant in 2000 should have been put on the taxes. Then we would not be in a deficit position at this time. But the decision at the time was they thought the water rates of the day would pay for the debenture, but at some point it didn’t pay for the debenture. It didn’t break even any more. In reality, utilities should pay for themselves, but they haven’t here for a long time.”
Swanson said because the rates had not gone up for nearly a decade, the PUB was sensitive to public reaction to a rate increase. That is why the rate rider, which was put on specifically to deal with the deficit, was run for five years instead of three, to cushion the blow.
Swanson said the change in the minimal quarterly charges are the ones that impact most people. These will go up from the current $53.91 per three months to $69.72 after February 1. They will then increase to $80.67 in 2020 and then to $91.84. This would be an increase in 2019 of $2.15 per 1,000 gallons of water and 21 cents per 1,000 gallons of wastewater. On top of this is $1.69 per 1,000 gallons in the special rider. The service charge for next year is also going up by $3.69. Interestingly, the wastewater only customers will see a drop from $71.47 to $45.60 in 2019, as PUB and the consultant found they were being overcharged.
The rider will stay on for only five years, Swanson stated, adding it will stay at a flat rate. It is only there to get the deficit under control, and then will disappear.
“This is not something where we said, ‘let’s just raise rates.’ We had to do this.”
Swanson added there is a new lagoon on the horizon. She hopes they can have this under control while they are working on that important and expensive project. As well, our “new” water plant will soon be twenty years old, and it has needed different upgrades over the years. She reminds ratepayers that even after five years, Boissevain-Morton will still be in the middle of the pack in terms of water rates, as ours were fairly low. In February, customers will get a smaller bill, as they will no longer be estimating usage, and then the increases will show up in their May bills.
The municipality operates the water treatment plant, five wells, the reservoir, three lift stations, a lagoon and waste and water lines. Most have had work done on them since 2001, and the lines are in the constant state of replacement. There are 806 customers and they do not supply water outside of the municipality.
When 2021 comes, they will review the rates and they could be frozen or go down, or they might have to apply for another increase. For the Head of Council, however, it is important to get into better shape by that time.
“It just needs to be able to pay for itself,” Swanson said. “We’re on top of it, we understand it, and we are confident going forward that this is in the best interests of our financial stability. We know what it costs to run our utilities and we know what it takes to get rid of this deficit and we will do it. It needs to be done to make Boissevain-Morton fiscally responsible.”
by PAUL RAYNER, Recorder staff