Big hike to YK trucked water fees heads to council for approval

City of Yellowknife staff are recommending that council move ahead with changes to water and sewer billing that will increase fees for trucked water users.

The city says it isn’t bringing in enough money to cover the costs of delivering water and sewer services to everyone.

While most residents are served through pipes, some neighbourhoods – like Old Town, Latham Island, the area near the former Con mine, Grace Lake and parts of Kam Lake – are serviced by trucks, which usually make two trips per week.

Consultants InterGroup, who spent years completing a report, say the fairest way of addressing the city’s revenue shortfall is to increase costs for trucked water and sewer users. InterGroup says up till now, that group of users has consistently paid less than it costs to run the trucked services.

In 2024, users of trucked water and sewer services “paid about only 64 percent of their cost of service,” city staff wrote in a briefing note to councillors, summarizing the report’s findings. “This was not the result of an informed policy decision, but a situation that evolved over time.”

The proposed solution is for the average customer’s trucked water and sewer fees to increase by 9.6 percent annually for each of the next three years. By 2027, that average customer’s bill would be $693 higher per year than it is now, the consultants stated.

Rates would stay the same for single-family homes. Multi-residential and commercial users would see their fees go down, amounting to an average saving of $200 to $400 a year by 2027.

The changes outlined by the consultants are an increase on an initial proposal brought forward in 2023. In that proposal, the extra cost to trucked service users was about half as large. The consultants say various costs have risen since then, including salaries, supplies, contracted services and fuel.

Councillors were given a first look at the updated proposal in April, and city staff have since been drawing up their recommendation. You can read the full report here, while the recommendation from staff is here.

The proposed changes are not yet set in stone. Council will examine the recommendation made by staff at a meeting from 12pm on Tuesday, which the city will stream live on its website. A final decision is expected at a later council meeting.

What’s a fair approach?

The consultants and residents who oppose the plan each say this is a question of fairness.

InterGroup says it compared Yellowknife to other municipalities with similar setups and inspected a manual of industry best practices to reach its conclusions.

The report also recommends some broader changes over time – like separating water and sewer fees – that the consultants say will make Yellowknife’s fee structure for water and sewer easier to follow.

“Following the recommendations contained in this report will result in a simplified water and sewer rate structure and utility bills, tied directly to costs and consumption, that residents will better understand,” InterGroup states, as well as “a defendable and documented rationale for why and how water and sewer utility rates are established, which has never previously existed.”

Even with the average trucked water customer paying an extra $693 a year by 2027, trucked customers will still only cover about 90 percent of the cost of serving them, InterGroup said, but the consultants added that’s close enough to be considered reasonable.

At the moment, the consultants said, commercial and multi-residential customers on piped services are “paying more than their fair share” – about 17 percent more than what it actually costs to serve them.

“Should trucked services ‘pay their own way’ or should some level of cross-subsidization remain in place? This is not an easy item to debate and there is often no right answer,” the consultants wrote in their report.

“Hay River and Iqaluit still cross-subsidize trucked services, although they recognize that it is not ideal.

“InterGroup is proposing that the city proceed with a phased approach to minimize the impact on customer bills.”

Trucked system already ‘substandard’

Kevin Hodgins says the system was already unfair to trucked water and sewer customers – and will get worse if these changes are made.

While the consultants found that trucked services customers were paying less than their fair share, that doesn’t mean they were paying less overall than piped customers.

“Single-family trucked consumers currently pay over double the rate of single-family consumers on the piped system,” Hodgins asserted, based on the per-litre rate each class of customer is charged.

“I find the recommendations unfair to those who rely on the substandard trucked system.”

If the proposed changes go through, he said, trucked customers could be paying nearly triple what a single-family home on piped water pays.

In a letter to Mayor Ben Hendriksen and councillors, Hodgins – a civil engineer whose home relies on trucked water and sewer – said the rate review is “fraught with challenges of fairness and unnecessarily pits community residents against one another.”

“Fundamentally I believe that water and sewer services should be fairly provided by the City of Yellowknife to customers in any defined class at equal rates regardless of delivery methods,” Hodgins wrote.

“InterGroup discusses ‘fairness’ in their report and focuses on the water and sewer systems but have clearly decided that trucked systems should pay more for services than piped. They do not discuss the unfairness and disadvantages of those consumers who have to rely on inferior trucked delivery where water is limited.”

In its report, InterGroup said the realities of trucked delivery – like maintaining your water tank, paying for extra deliveries if more water is needed and so on – are presumed to be “accounted for within the local real estate market and the decisions homeowners make when purchasing a property.”

Hodgins, in his letter, concluded that “given Yellowknife’s relatively small municipal system and the vast interdependency of elements between users,” a system like the one proposed by InterGroup “is unrealistic, unfair and unnecessary.”