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Board of Control May 2008

Rate Structure Review Water, Sanitary & Storm Sewer

May 28,20013 Dave RMd.II, Associate WcePmsident Physlcal Plant CL Wpltal Plannlng Servlces

Gitta Kukzyckl, Wce-Pmsldent Resoume8 CL Operations

SUMMARY

We have four points that we request you consider:

Our costs associated with campus systems be taken into consideration

Storm Sewer Levy is inappropriate

We are in a unique circumstance and would like to be under separate rates

That specific consultation occur as we move forward

- - *

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Points to Consider related to the University of Western Ontario

The University understands that the provision of services such as water and sanitary sewer has associated costs. We are prepared to pay our fair share of the cost

We understand that this proposed increase in the water and sewer rates is suggested in lieu of raising property taxes. The Government of Ontario, through the University, provides grants to the City in lieu of realty taxes for the University. This proposal to shift the tax could be construed as a means to increase the tax assessed to the University beyond the Grant in Lieu.

n

* The University pays development charges (millions over the years), industry does not, nor does Fanshawe College, yet we also pay taxes. We are lumped in with industry rates. It is our position that the payment of development charges should be taken into consideration when setting rates.

The University, with a population of 36,000, is very much similar to the cities of St. Thomas and Woodstock. We have capitalized, constructed and operate, administer, replace and maintain in excess of 90,000 linear feet (27.7 kilometers or 17.2 miles) of domestic water, sanitary sewer and storm sewers exterior to all of our buildings.

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Pipe Value= diameter x length x unit cost (based on average depth)

* We believe that the fact that we are responsible for the installation, operation and maintenance of such a large network makes us much different than other IC1 consumers within the City who, in essence, have the systems serving their facilities operated and maintained by the City. We do not have that service on campus. We believe that, when you include the costs we pay the City and those we incur ourselves, our total contribution is greater than other customers. This does not meet the fairness test.

It is on this basis that we believe that the University should not be taxed at the same rate as other consumers, and that it be taken into account in this particular, and any future, proposed increases in water and sewer rates.

.

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In addition, we believe that the proposed change in storm sewer rates (5125K) for UWO is not appropriate. We construct and maintain the system on campus and, with minor exception, the outfalls are to the RIVER. The proposal that land area calculations by a professional engineer could be used to reduce charges is vague, undefined, and not applicable. We do not support this approach.

Secondly, we believe that the only storm sewer charge to UWO should be based on "maintenance" of the Thames River proportionate to our small contributory area over the total area of contribution throughout the city.

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We have had good dialogue with City staff and appreciate the opportunities provided for discussion. Some outcomes have been supported, including the concept of pipe value and aggregating of consumption.

We have asked that a Consultation Committee of major users and the City be formed. We suggest that the formation of this Committee would be helpful in resolving this and other such issues now and in the future.

*

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May 26,2008

For May 28th Public Meeting of Board of Control

To the Chair and Members of Board of Control:

The London Chapter of the Canadian Condominium Institute (CCI) has among its members approximately 200 Condominium Corporations, who in turn represent thousands of individual London home owners in all parts of the City and over. 100 professionals and trades who provide their expertise within the condominium communities of London.

Representatives from our local Chapter of CCI have attended several of the previous public meetings on changes to the rate structure for water, sanitary and storm systems. We have also met or communicated with the ‘water’ department on several occasions to more fully understand the changes proposed.

In our opinion, the proposed changes meet the criteria of being equitable and consistent with a ‘user pay’ philosophy. Therefore, we wish to go on record as supporting the proposals now before Board of Control and urge their adoption as proposed.

Sincerely, LONDON & AREA CHAPTER BOARD OF DIRECTORS

Per W Wheeler Chairman, Municipal Affairs Committee CCI-London & Area Chapter

London & Ai,cn Cbapter P.O. Box 5 1022 1593 Adelaide Street N . London, ON NSX4P9 Tcl: 510453-0672 * Fnx: 519642-4726 ~ ~~~

Email: ccisw@cci-sw.on.w + Website: www.cci-sw.on.ca

To:

Re:

A W E D 5c

R e ; *J;c N S y 2 s / a

an league of London association of community groups

Her Worship the Mayor and Members, Board of Control - City of London

Board of Control Agenda Item #24 Proposed Changes to Water Rates Wednesday, May 28,2008

Dear Madame Mayor and Controllers,

I am writing on behalf of the Urban League of London to express our support for the proposed changes contained within the Water, Sanitary and Storm Rate Structure Review. We feel that the proposals incorporate a reasonable balance with regard to the respective burdens on residential, institutional, commercial and industrial ratepayers, London’s competitive economic position, and necessity for encouraging conservation.

We recognize the following advantages contained within the proposals:

1. Rate structure is more streamlined and clear reducing ambiguity and inequitable assessments between rate categories found in the current structure.

2. Recognition of the need to encourage a reduction of water use by using a two-stage rate for residential ratepayers similar to that lised by Hydro.

3. Overall reduction in burden to residential ratepayers. 4. Adoptatibn of a User Pay and Full Cost Recovery system to ensure the long-term viability of the

municipality’s water and sewage infrastructure.

The challenges faced by the City of London in maintaining and upgrading water and sewage ineastructure while providing strong environmental stewardship for our watershed are not easily resolved considering the substantial expense required to deliver this service. It is our view that the proposed changes will help accomplish these ends while moving to a rate structure that is more fairly harmonized between the different categories of ratepayers. We hope the Board of Control and Council will see fit to implement these proposals.

Sincerely,

Stephen Tumer Chair

460 Berkshire Drive, Unit 102, London. ON NG] 351 'r. 519-672-6999 i. 519-672-6462 E. InFo@lpme..a w w w . I p ~ ~ ~ ~ ~ . ~ ~

May 27,2008

City o f London Board of Contxol

Via Fax: 519-661-4892

Dear Mayor and Members of Board of Control:

Re: Rat0 Structure Review - WatedSewer Charges

The London Property Management Association represents E wide diversity of owners and managers of rental property in the City of London.

We have reviewed the reoomrnendations set forth in the Sraff Repon of May 7,2008.k connection with ~e Water, Sanitary and Storm Rate Structure Review.

We are concerned that the proposal before Board of Control would re-designate bulk meter buildmgs from commercial to residential, rhus requiring the owners, and the tenants, to pay water/seww rates at the much higher rate. The pipe value to service this type of housing is much less than The pipe value for traditional single-family residential dwelhngs; however, it does not appeat to be ,reflected in the proposed rate, structure.

We do'not agree that the City has adhered to the methodology and principles set forth in its report. If left unchallenged thi~ user group would face, on average, an increase in wilily ram of almost 34%. ,

We feel that properties contahhg 5 units or more should retain their commercial classification. The perceived benefit to the City by redesignating these properties to residential i s far out-weighed by the negative financial impact on low-income households.

In our view, these typical multi-residential properties provide an knportant source of economical. housing for the citizens of London; housing that the City itself is unable to provide. There are economies o f scale that we do not believe are rmly reflected in the City's modeling;

We urge Board of Control to retain the commercial designation for multi-unit buildings containing more than 5 residential units. Alternative we. respwtively request a longer tenn phase-in that ,w ental increase. We propose a rate phase-h of 15-20 years so the rate adjustment and m able to maintain their tpusing.

w e qvst &at you will. take our submission

... , .

......... ~~~ .... .-,. ......... ____ ~

I

...

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ . *. . . . -.... .".* . . . . . . . . *,.

!

> Last April BOC supported Principles > Proceeded to consultation on issues (5 public

meetings and numerous one-on-ones) > Modified some recommendations where it

could be justified - benefits a few customers

tic meeting at BOC (today)

1

P Updated for 2008 budget P Examples of inequities > Identification of what has changed

How is this report the same? P Based on principles, user pay and “pipe

value” ntial pays higher rates because they

&.water plant expansions qjespsnsible for more of the pipe costs

2

>Bolster Conservation rate, include multi-

>Residential pays more than IC1 - as now >Large IC1 customers pay for pipes in

basic rate, additional use at marginal cost - as now

family - Conserve fhe Future

ggregate accounts for adjacent

{ti-family becomes residential, except

Individually Metered Multi-family

3

v Sanitary Issues > Change structure to match water,

including Economy of Scale rate >Charge sanitary based on all water

consumed even if it doesn’t enter sewer > Infiltration/lnflow charged based on Pipe

Value - means residential pays more xempt “irrigation only” accounts from

Based on 2008 rates - Sanitary Sewer

IC1 first 3,000 m3/month $ 0.752 IC1 Additional m3/month $ 0.590

9 Backed away from charging developments, vacant parcels and open space - parks, golf courses, etc

9 Discount residential properties 25% without a storm sewer nearby (1 00 metres)

9 Only some industries pay “area” rate now Large property “area” reduction if they can

5

Residential 250 m

$30,000 I $25,000

$20,000

$15,000

$10,000

$5,000

$0

6

$1,400.000 3 I

I) .I $1,200,000

Wm' WATER RATES AMONG SELECTED OECD COUNTRIES

.*.sa

INDEX OF AVERAGE MONTHLY RESIDENTIAL WATER AND WASTEWATER PRICES (Ontario-100)

Questions?

London's Advantage Setting the Standard Conserving the Future Securing Tomorrow

Based on 2008 rates -Water

Minimum Monthly 5.00

IC1 Additional m3/month

._ ~ . ~

Based on 2008 fixed monthly - Water

4.4300 $ 8.6300 $ 11.5700

,'

:,;.

4.01 90 1112" 5.7762

6.6282 3" $ 37.3471

47.5876 6" 75.2368

$ 88.5494

9

ent vs Suggested ture

Commercial, High Rise

institutional

Industrial

Industrial over 600,000 m3

iiii , , <>,p Based on 2008 rates - Storm Sewer

$ 142.08

$ 113.52

$ 985.09

.$ 837.48

Revenue Sources

Residential 26.53 0.60 27.13 IC1 23.32 0.48 23.81 Total 49.85 1.08 50.93

10

IC1 Total

15.86 15.86 46.35 44.72

Why did it take so long

P Significant consultation - on-going P2008 budget deliberations - avoid

confusion between the two

pcevious based on 2006/2005)

I1

. , Why are we doing Review

Conform to Best Practices in light of SWSSA

Several examples of inequity in existing London rates are unique in province and

and SDWA - Regulation 453/07

complex duce consistency between water and

hat has changed from existing?

Structure is simplified, but still complex User pay and full cost pricing are enshrined in London's Advanfage Justification has been provided for a difference between Residential and IC1 E'

12

$90,000

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000 ?,. .,.,..,, ' $10,000 \,,y i," y"::'. '~

?.\\:-' SO

, , , I '\ \...,'.,,

$300,000 1 $250,000

$200,000

$150,000

$100,000

$50,000

SO

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