Most of you are aware of the unfair distribution of the water fees.
You use 10 m3 a quarter you pay $66.20, a whopping $6.62 per m3.
You use 100 m3 a quarter you pay $177.8 or $1.78 per m3.
Is it fair pricing? A resounding no! Could it be better? You bet it could be!
As you know most of our infrastructure is financed by taxes. Our roads, bridges, the Theatre, Wesbuild Centre, the Fire Halls etc., all were built on borrowed monies and repaid by taxation.
Theoretically, the operation and maintenance is supposed to be taken care of by user fees. That is not the case with the sports facilities and the Theatre. We subsidize them by taxes.
Politicians decided that water infrastructure financing should be treated differently. In this case we not only pay for the operation and maintenance of the service by user fees but we finance the entire loan through those user fees. To me this does not make sense.
When I asked the reason for this anomaly the explanation floored me. We can finance water infrastructure through user fees because we have captive customers. With sports facilities, the Theatre user participation is optional. If the user fees are too high people will not use the facilities.
However, everyone must use water and sewer so we can increase water rates with impunity. The customer must pay the price we set.
I totally disagree with this approach. It is a totally illogical decision. The infrastructure is the means of delivering the product or services. It is not a consumable product. The consumable product is the treated water delivered to the customers. The cost of the product is determined by the cost of production.
In the case of water the infrastructure financing cost currently is about $4 million annually. However, while we are paying for the infrastructure cost, administration is also putting away reserves for the replacement of said infrastructure. In other words we are now paying twice for the same infrastructure that will probably serve the community for 40-60 years. I do not think that is sensible.
In an effort to try to convince fellow Directors on GVAC I have prepared a couple motions for the next Special Meeting of the Committee that will be discussed on November 17 at 8:00 AM in NORD Board room. You are invited to the debate of those motions. Details of the motion can be vied here.
You use 10 m3 a quarter you pay $66.20, a whopping $6.62 per m3.
You use 100 m3 a quarter you pay $177.8 or $1.78 per m3.
Is it fair pricing? A resounding no! Could it be better? You bet it could be!
As you know most of our infrastructure is financed by taxes. Our roads, bridges, the Theatre, Wesbuild Centre, the Fire Halls etc., all were built on borrowed monies and repaid by taxation.
Theoretically, the operation and maintenance is supposed to be taken care of by user fees. That is not the case with the sports facilities and the Theatre. We subsidize them by taxes.
Politicians decided that water infrastructure financing should be treated differently. In this case we not only pay for the operation and maintenance of the service by user fees but we finance the entire loan through those user fees. To me this does not make sense.
When I asked the reason for this anomaly the explanation floored me. We can finance water infrastructure through user fees because we have captive customers. With sports facilities, the Theatre user participation is optional. If the user fees are too high people will not use the facilities.
However, everyone must use water and sewer so we can increase water rates with impunity. The customer must pay the price we set.
I totally disagree with this approach. It is a totally illogical decision. The infrastructure is the means of delivering the product or services. It is not a consumable product. The consumable product is the treated water delivered to the customers. The cost of the product is determined by the cost of production.
In the case of water the infrastructure financing cost currently is about $4 million annually. However, while we are paying for the infrastructure cost, administration is also putting away reserves for the replacement of said infrastructure. In other words we are now paying twice for the same infrastructure that will probably serve the community for 40-60 years. I do not think that is sensible.
In an effort to try to convince fellow Directors on GVAC I have prepared a couple motions for the next Special Meeting of the Committee that will be discussed on November 17 at 8:00 AM in NORD Board room. You are invited to the debate of those motions. Details of the motion can be vied here.
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