The Municipality of Grey Highlands has taken the first step towards developing a new financial plan and rate study for its user pay water and sewage systems.
At its meeting on Oct. 4, council voted in favour of issuing a request for proposal (RFP) from firms interested in completing the rate study work. The municipality’s current financial plan and rate study expires in 2026 and there is a legislative requirement to have a new plan in place for 2026 - 2030.
Grey Highlands has user-pay water systems in Markdale and the Kimberley area. And it has user-pay sewage systems in Markdale, Kimberley and Flesherton.
The scope of the work in the study includes:
- Review current rates and fees associated with water and wastewater services and propose rates and fees to ensure recovery of actual costs associated with the services provided.
- Review municipal policy and other appropriate laws, as necessary.
- Review current charges including capacity charges and propose charges to ensure recovery of actual costs associated with services provided.
- Identify new and proposed expenses including but not limited to water and wastewater and propose rates and charges that will ensure recovery of actual costs.
- Review current debt service and long-term capital improvement projects, and propose financing action plan for current status, as well as increases in future debt service from financing of capital improvement projects.
- Provide for adequate funding for infrastructure renewal and asset management.
- Consider the Water and Wastewater Master Servicing Plans and the impact on rates.
- Provide a comparison of current and proposed water and wastewater rates and capacity charges against surrounding public agency water and wastewater purveyors.
- Provide a rate model that the Municipality can use for forecasting and planning.
The resolution to proceed with issuing the RFP drew some comments and concerns from Mayor Paul McQueen.
The mayor wondered if the financial plan and rate study was premature. He said the municipality is working on a new master servicing plan and expressed concerns about developing the rate study before the servicing plan was complete. Earlier this year, council voted to proceed with an update to the master servicing plan.
McQueen noted the servicing plan developed a number of years ago envisioned a possible long-term concept of looping the municipality’s water service from Markdale to Kimberley to Eugenia to Flesherton. McQueen said he didn’t want to see that kind of long-term concept, which may never become a reality, included in the rates for the water users.
In response, staff said the two plans are separate and unique and both are required to plan for the future of the two systems. Long-term concepts in the servicing plan would not be included in the rates of today.
“Those numbers were not in the rates,” said Shawn Moyer, director of environmental services.
CAO Karen Govan said the rate plan looks at the next four or five years, while the master servicing plan looks out many, many years.
“In 2012, the master servicing plan was completed. It’s time to update that plan and say realistically where would you like to take the municipality over the next 20 years,” said Govan.
McQueen said his concern was rates for the current users increasing in order to pay for future growth and expansion of the systems.
“Why would current users pay for expansion?” he asked. “It’s growth.”
Govan said there is a specific set of calculations used to determine the finances for the expansion of infrastructure like the water and sewage systems. She said the calculations would include figuring out how much developers would pay to expand such infrastructure, how current users would benefit from upgrades/expansions and if local improvement charges would be used in areas that would receive those services that don’t currently have them.
“It is a very complex calculation,” said Govan.
Council approved issuing the RFP in a unanimous vote.
