Kamloops council to decide on utility rate after reconsidering 25 per cent increase

Big water rate hikes floated

Council narrowly voted in favour of the 25 per cent water utility rate increase during its Oct. 31 meeting — which would amount to an extra $95 on the average household’s bill in 2024 — but then opted to reconsider its decision a week later.

City staff were asked to return to council with more options, which will be discussed and put to a vote during a meeting Tuesday.

In a report prepared for the meeting, city staff said moving forward with a 25 per cent rate increase would cover council-approved increases to the development cost charge water assist factor, and the $3.2 million being spent for Noble Creek Irrigation System decommissioning program payments.

Staff said funding is also required to address intake issues at the Kamloops Centre for Water Quality.

“This option would also provide an adequate level of funds to provide for ongoing and predictable changes to the water utility rates,” the report said, adding a healthy reserve also provides a buffer against marketplace volatility.

If council moves forward with a 25 per cent utility rate increase in 2024, staff said proposed rate increases for several years afterwards will be lower — going down to five per cent by 2026 — than if council chooses to smooth out next year’s rate.

Council could also choose to fund work at the Kamloops Centre for Water Quality through debt, which would result in an 18 per cent water utility tax increase next year — an increase of about $69 for the average home.

“Use of debt would result in an overall increase in costs associated with interest incurred on the overall cost to borrow,” the staff report noted.

While next year’s initial water utility increase would be lowered with this option, taxpayers would be looking at 15 per cent increase in 2025 and 2026, and a 10 per cent increase in 2027.

Finally, staff said council could delay a water main project in Westsyde until 2026, which would also reduce the proposed utility rate fee to 18 per cent in 2024.

However, the report noted this isn’t recommended because the Westsyde infrastructure is nearly 50 years old.

“It introduces an aspect of risk into the overall asset management and planning process that could result in infrastructure being functioning beyond its expected useful life and may not perform as needed and lead to failure,” the report said.

Staff noted council will need to decide on how it wants to move forward by Tuesday so the necessary bylaws can be prepared and brought forward for adoption.

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