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Council to hike utility rates in the new year for aging infrastructure

Prince Rupert city council voted to pass three new asset management reserve funds for utilities that reached the end of their useful life.

What’s needed for the City of Prince Rupert won’t be sexy, flashy, or even visible.

But it’s what’s next on the docket for the city to continue functioning in the next decade and years to come, emphasized city staff — and it will cost taxpayers.

Prince Rupert city council voted on Dec. 12 to pass three new asset management reserve funds for three utilities that reached the end of their useful life last Wednesday.

On top of a three per cent rate hike per year for the next four years for water utility management, sanitary and storm sewer utility management and solid waste management, council imposed an additional two per cent fee on utility prices for water, sewer and solid waste services.

The cemetery fees and charges will increase three per cent per year over the next four years, with no asset management fund fee imposed due to the cemetery already having a care levy associated with cemetery management.

The new asset management reserve funds have been put in place because of Rupert council’s endeavours to rebuild Rupert and address its $280 million infrastructure deficit, to have funds available to implement planned or emergency upgrades to water, sewer and solid waste utilities, and even successfully receive grants from senior government levels, which have told municipalities to start having a reserve fund in place, and to start adding money to it. It’s meant to act as a savings account.

The bylaws are adopted in the same year where Rupert council voted not to increase taxes in its operational budget earlier in the year.

But staring down the multi-million dollar infrastructure deficit and the possibility of not receiving any grants in the future from the province or feds, council voted to increase the rates on utilities to keep up with cost pressures like transportation, fuel and supply costs, encourage the installation of water meters and keep up with wage increases.

“We do have contractual obligations for collective agreements. It was five per cent before, but we went to three per cent to try and cut it as best we could,” said city chief financial officer Corinne Bomben last Monday night. “These increases are set to try and be as lean as possible.”

The utility reserve funds can only be used for each specific utility and will never be used for things like road upgrades, building upgrades, or any city operational usage.

Bomben emphasized that while previous operations increases in bylaws increased by five per cent with no capital replacement allocation, these increases add up to five per cent, but with two per cent being set aside for future renewal of infrastructure.

The decision to adopt the bylaws came with internal struggle from council members, who set out not to raise taxes for an already tax-strapped city.

“I can’t support this motion. Another number, like a half-per cent or one per cent [increase] maybe,” said Coun. Gurvinder Randhawa, who voted against adopting the bylaws Monday night, and added that taxpayers already face high recreational fees, high taxes, and an increase on anything will reflect in the housing market and commercial market, already struggling.

Couns. Barry Cunningham and Wade Niesh were also conflicted, but voted to go ahead with the bylaws.

“I really wish that councils from 30 or 40 years ago, when the town was in its heyday – I wish they had thought about our future and put money away for us, so that we wouldn’t be in this position,” Niesh said. “It bothers me so much that we would have to raise the rates again every year, but after being in this seat for two years [I see] all the crap the provincial government has downloaded on the municipalities and how little money the feds give us. Now we have to put an asset management plan in place, so that we can beg for some more money from them, unfortunately it’s the way to go.”

Cunningham also had a hard time voting in favour of the bylaw.

“It’s still a big jump for people on fixed income … I struggle with this. It’s one of the reasons why we sit in these seats and make these tough decisions. If we don’t make them the city doesn’t go forward and it starts falling apart. But people’s lives could be falling apart because of [the hikes].”

City manager Bob Long emphasized to council that the reserve funds need to be put in place immediately.

“We run the risk of not ever getting another grant because we haven’t got a proper asset management program. So these are risky things for council to ignore, because I think as professionals, we have an obligation to tell you that this is the most rational and appropriate behaviour on the part of the city as a corporation – to start putting some money away,” he said.

“We have had constant failures in our water system and our sewer system just in the last year. Sometimes we’re our own worst enemy because these things seems seamless and easy and everybody can go to sleep and turn the water on … With underground servicing it’s very difficult to convince people that these are important assets, but we see that they’re failing on a regular basis.”

In March, the city held a public vote at the Lester Centre to ask if residents would accept raising rates to put money away to address infrastructure needs. Approximately 30 attended and responded that yes, the fee increases would be reasonable.

Mayor Lee Brain and Coun. Joy Thorkelson also voted to pass the bylaws Monday in a 4-1 decision to give the first three readings to the bylaws, with Couns. Nelson Kinney and Blair Mirau absent and Randhawa voting against.

Council will evaluate the rules around accessing the reserve funds in the coming months.

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