Kingston City Council has approved the implementation of deferred 2023 charges for bulk water usage and wastewater (septage) disposal. The vote comes after Council approved the new charges back in March, but elected at an April meeting to defer the implementation of those charges, to allow Utilities Kingston additional time to review the charges and the implementation timeline.
In advance of Tuesday’s meeting, councillors were presented with a staff report which explained that a review conducted by Elenchus Research Associates Inc. (Elenchus) found the new charges “just and reasonable.” Starting in January of 2024, customers who purchase water in bulk from Utilities Kingston will be charged $3.73 per cubic metre, up from the $2.27 they pay now. Meanwhile, wastewater disposal will now cost $20 per cubic metre for non-industrial users and $26.07 per cubic metre for industrial users, an increase of $6.93 and $9.03 respectively.
Besides the implementation of the new charges, the report also indicated Utilities Kingston will complete a standard water and wastewater study next year, for implementation in early 2025.
On Tuesday night, councillors had the opportunity to question City staff on the contents of the report, which supported the rate increases but noted residential and commercial wastewater rate classes are currently subsidizing the costs of wastewater disposal services. When asked about this subsidization, Randy Murphy, Chief Financial Officer for Utilities Kingston, said, “In the past, we have included these costs as part of the other costs for residential and commercial ratepayers,” and he confirmed the average customer is subsidizing by approximately $1.39 a month.
Portsmouth District Councillor Don Amos remarked on the need for parity among Utilities Kingston’s various rates and charges, saying, “My only concern is — obviously there’s a subsidization that’s happening there — ensuring that we are trying to be a little customer-friendly in bringing our rates up to par.”
Amos also noted the need for all Utilities Kingston customers to be fully informed about the costs associated with bulk water usage and wastewater disposal, “just to make sure that we have solid communication with our customers, so there is [no] ‘sticker shock,’ and they can prepare and understand why the process is happening the way it is,” he remarked.
In comparing the rates between customers connected to the municipal water system and rural residents who purchase water from the City’s towers and are responsible for their own delivery, Utilities Kingston President and CEO David Fell noted, “Residents connected to the municipal water system have a different rate structure… and that is due to the fact that there are different costs, different infrastructure, different volumes, and different customer numbers to spread those costs around.”
In response, Countryside District Councillor Gary Oosterhof questioned whether it was fair for rural residents to pay higher rates for bulk water usage.
“Is it not justifiable, though, that rural residents would pay something less, as there is no infrastructure? My residents [who] purchase the water from the towers have to look after their own delivery, which is costly as well… They are buying it from the tap; the Utilities investment from the lake to the tower is the same,” he said.
In response, Fell noted the cost differences between residents who rely on bulk water and those connected to the municipal system.
“The rates that we’re proposing are aligned with the costs of the different rate classes and distributed across… For example, to fill a two-cubic meter hot tub, to fill it up with bulk water, right now the cost would be $4.50. Starting in January 2024, that cost would be $7.50. That’s the cost [of] the water. We don’t influence or control the cost of delivery,” he noted.
Fell added, “By comparison, a residential customer in the City of Kingston, to fill their hot tub… with the same amount of water… that would be $3.50. However, the residential customer is paying a $22.29 monthly service charge, and there is no monthly service charge for the bulk water distribution,” he said of the difference between the two customer bases.
While the report by Elenchus noted that the approved charges are in keeping with rates charged by an unidentified “neighbouring municipality,” Fell explained that for its own reporting Utilities Kingston does not perform comparisons to other municipalities. “Our costs are specific to our location, to our treatment system, to the age of our infrastructure. We do look at neighbouring municipalities to ensure that we are… relatively close to cost,” he said.
The recommendations eventually passed with unanimous consent from councillors. The new rates for bulk water usage and wastewater disposal will go into effect on January 1, 2024.