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This article was published 14/2/2019 (414 days ago), so information in it may no longer be current.
The proposed residential water and sewer rate increases for 2019 went under tough scrutiny by councillors Thursday, who were unable to support the proposal.
Councillors on the environment committee were deadlocked 2-2 on a vote to endorse the 4.7 per cent increase.
The tie vote means the proposal still will go to council but without a recommendation from the committee overseeing the department operations.
"I have an obligation to make an informed decision and cast a vote based on information and true data and I don’t feel I have that right now," Coun. Kevin Klein (Charleswood-Tuxedo-Westwood) said ahead of the vote. "I’m starting to think that maybe we don’t have a revenue problem, we have a spending problem or we have a priority problem."
Klein and Coun. Jason Schreyer (Elmwood-East Kildonan) voted against the increase, while Couns. Cindy Gilroy (Daniel McIntyre) and Marcus Chambers (St. Norbert-Seine River) voted in favour.
The proposal goes before Mayor Brian Bowman and members of his executive policy committee Feb. 19, where it will likely be supported, before it goes to council at its Feb. 28 meeting.
The water and waste department is asking council to approve combined water and sewer rate increases of about 4.7 per cent beginning April 1.
Moira Geer, director of water and waste, told the committee the increase would add about $15 ($60 annually) to the quarterly bill of the typical household.
While the proposed increase is well above inflation rates, it is substantially less than the annual increases of the past three years.
In the spring of 2016, council approved annual combined water and sewer rate increases of 9.2 per cent (2016), 8.9 per cent (2017) and 7.4 per cent (2018).
Geer said the increase is necessary to cover, in part, the costs related to the $1.8-billion North End sewage treatment plant upgrade, the city’s $30-million annual combined sewer overflow mitigation work, and department operations.
The water and waste utility is entirely supported by revenue from water and sewer bills.
Geer said the department is only proposing an increase for one year, adding future increases will be brought to council later in the year as part of the multi-year planning and budgeting process.
Geer said the proposed increase is based on an assumption that Ottawa and the provincial government will contribute a combined $300 million towards the $1.8 billion price tag for the North End sewage plant project, adding however, future rates could be lower if the upper levels of government provide more funding; or, she added, the rates could be higher if their contribution is lower.
Both Klein and Schreyer said they opposed part of the water and sewer revenue being devoted to offset property tax increases, what’s been called at city hall a dividend.
Schreyer called the dividend another form of taxation, which he couldn’t support.
Klein said the dividend is "a bad business practice and it’s not good stewardship of the money."
Winnipeg is the only municipality in Manitoba, and one of the only few in the country, that is allowed to divert revenues to the water and sewer utility into city hall’s general revenues.
Council began diverting the water and sewer revenue in 2011, taking eight per cent to soften property tax increases, calling it a dividend. Shortly after the 2014 civic election, the new council under Mayor Brian Bowman increased the dividend to 12 per cent (a 50 per cent increase).
Between 2011 and 2017, council diverted a total of $180.3 million from the water and waste utility into general revenues. A further dividend of $39.2 million was budgeted for 2018 but actual amounts have not yet been disclosed.
Klein said he saw no evidence that the department had sought to mitigate the rate increase through department efficiencies or savings, adding he thought more conversations should be had with Ottawa and the province.
Earlier, the committee did approve a tentative work plan and budget for the North End sewage treatment plant.
While the overall cost of the project is now estimated to be $1.8 billion, Geer said the department wants to proceed first with upgrading the plant’s power supply and headwork facilities – which has a $408 million price tag.
The rest of the work would be split into two separate projects, Geer said: the upgrade to the biosolid facilities, $553 million; and, the $828 million upgrade to the nutrient removal facilities.
If council approves, Geer said work on the first project would begin in 2020 and be completed in 2025. Starting dates for the other two projects, she said, would be evaluated after contracts have been awarded on the first-stage project.