Yellowknife council set to avoid big trucked water fee hike, for now

Yellowknife city councillors appear in favour of preserving the existing way fees are split between piped and trucked water customers, at least for the time being.

While many Yellowknife homes and business are on piped water, some rely on delivery by truck, usually twice a week.

The city’s water and sewer rates have extra complications on top, and City Hall has spent years discussing ways to simplify and improve the whole system.

Meanwhile, the city is trying to erase a deficit of more than $1 million in its water and sewer fund, which means more revenue must come from somewhere.

Earlier this year, consultants proposed increasing trucked water and sewer rates by hundreds of dollars a year, but doing so in a way that customers on trucked water would experience a particularly large rate hike.

The argument for that approach – which council was initially told would mean a $693 annual fee increase for the average trucked user by 2027 – was that trucked customers currently don’t pay enough to cover the cost of providing the service.

As a group, they pay about 68 percent of what it costs the city to truck water.

Trucked customers have argued they already pay more per litre of water than piped customers, even if that doesn’t cover the cost of delivering the water to neighbourhoods without pipes like parts of Old Town and Latham Island, Grace Lake, parts of Kam Lake and the Con trailer park.

One resident, Kevin Hodgins, submitted a proposal of his own that would have seen each customer pay the same rate per litre, regardless of how they get their water.

City Hall says it considered that option but decided not to present it to council. Instead, councillors were told on Tuesday that their options are:

• the consultants’ original proposal, with a big hike for trucked water users;
• a modified version with slightly less of a hike for trucked users; or
• keep the split as-is between piped and trucked, then spread annual cost increases equally among the different user groups.

In Tuesday’s meeting, a majority of councillors expressed support for option three, which doesn’t significantly tinker with the share of revenue that trucked users provide.

If council formalizes that approach at a future meeting – Tuesday was just a briefing and discussion – then rate hikes are still expected in the years ahead, but without as much underlying change as was initially proposed.

Some tweaks set to go ahead

While city staff said option three was the “least advisable” option, councillors presented it as a way of making less drastic tweaks while buying more time to study the ramifications of major changes.

Choosing option three means some work will still go ahead to simplify how rates are billed to people and separate out water and sewer rates rather than charging a combined fee. City staff consider those to be important pieces of work.

But rebalancing who pays what share of the overall revenue and how the city recovers costs from each group – known as the revenue-to-cost ratio – will be paused indefinitely.

“Where my mind is stuck is the revenue-to-cost ratio, because I feel like there’s still pieces we haven’t teased out,” said Mayor Ben Hendriksen during Tuesday’s discussion.

He raised the issue of surface water lines, a quirk of Yellowknife water delivery that give some Old Town residents easier access to water in summer but come at a significant time cost to the city. City Hall has recently contemplated no longer maintaining the lines, to opposition from some residents who say they rely on the service.

From June: Mayor says YK trucked water issue has parallels with carbon tax

“Do they stay? Do they go? Is there some sort of local improvement charge in the future in order to adjust those? We haven’t struggled with that yet,” said Hendriksen, using surface water lines as an example of areas council would need to understand before embracing a lasting solution on water and sewer rates.

“There are pretty key, fundamental pieces we haven’t actually grappled with yet,” said the mayor.

“Before we sort-of throw the baby out with the bath water and restructure our revenue-to-cost ratios, I want to know the answers to those pieces first.”

He characterized option three as: “Get the billing changes done, keep the ratio where it’s at right now, and then look at these other pieces.”

‘Uniqueness costs money’

No councillors expressed strong opposition to that approach, though some were also open to option one, which would have begun to tweak the revenue-to-cost ratios while limiting the fee hike trucked users would face.

Councillor Tom McLennan said he would back either of those options. Deputy mayor Rob Warburton favoured option one and a move toward trucked users paying what the service costs the city.

“We all say the North is very unique … but we can’t ignore it when that uniqueness costs money, and this is the case here,” Warburton said.

Ryan Fequet, Garett Cochrane and Steve Payne supported option three, with Payne calling it a “fair way forward.”

“We are a city of subsidies,” said Payne, listing municipal subsidies for hockey ice times or the way people who aren’t parents still pay school taxes.

“I think water delivery in this city should be looked at as a whole,” he said, “and if this is a matter of lack of revenue – and we need to make up for it – well, that system as a whole needs to come up and meet that.”

In a briefing note, City Hall said the average impact of option three would be an extra $22 on a piped single-family residential customer’s annual bill after three years, an extra $43 on the average trucked bill, a $33 saving on a multi-residential bill, and a $122 saving on a commercial bill.

Option three anticipates a three-percent fee increase in 2028 “to address funding shortfalls.”

Even if council approves option three later this month, the city says it could take up to year to have all the necessary adjustments in place.

More: Read the briefing note to council in full

Hodgins, in emails to other residents seen by Cabin Radio, maintained that the solutions considered by the city don’t truly offer equality as those options continue to charge some customers more than others per litre of water.

“Water and sewer is a fundamental human right and rates should be equal for all consumers in any given class,” he wrote.

The city dismissed Hodgins’ consumption-based approach, in part stating that it would move all revenue to a variable source – how much people consume – and this was “risky as it will increase the revenue volatility.”