Last night city council passed a motion on what they say will function as a middle ground interim solution to water woes that some say discriminate against trucked water customers.
Dozens of residents took centre stage at the council meeting that went overtime by over 2 hours. City council deliberations kept many residents up “past their bedtime” and kept baseball fans away from the first World Series game played anywhere north of the Canada/US border in over a quarter of a century.
The city’s current water and sewer rate structure came into place over a quarter of a century ago. The “rate rebalancing” to the water and sewer rate was originally proposed at a city council committee meeting on April 14.
Back in April, a representative from by Intergroup Consultants Ltd, told council that residents hooked up to piped water and sewer services will “overpay” for those services in the future if they remain on the current rate structure. On the flipside, residents who rely on trucked services will be “underpaying” if they remain on the current rate structure.
The consultants recommended a “phased-in” approach over five years to achieve “rate rebalancing” where customers on piped water would pay less and customers on trucked water would pay about five times more.
The consultants recommended reducing water and sewage rates over the next three years for pipe customers, beginning in 2026. They recommended reducing the rate by 0.7 per cent per year for the average multi-residential customer and by 1.7 per cent for the average commercial customer using piped water.
On the flipside, the proposed rate change would mean a 9.6 per cent increase in rates per year for the average for trucked water customer for three years.
The consultants proposed that the change take place through phases in the next few years (beginning in 2026) to spread out the utility bill impact over time.
The city was provided with a detailed analysis of the water and sewer revenue requirement to meet the costs of water and sewage services.
To do so, the added potential rate premiums to trucked services was suggested as a method to bring Revenue to Cost Coverage within a range of 90 to 110 per cent, considered consistent with “best practices” in other jurisdictions.
City administration worked with the consultants to identify three options:
- Option 1- Balanced Consumption Rate: Modify the recommendations by consultants by recognizing the cost of service for all customers while mitigating rate increases to trucked services customers. This includes rates targeting an 80 per cent recovery in the cost of service for trucked customers from the current recovery rate of 68 per cent
- Option 2 – follow the consultants’ recommendations
- Option 3: Maintain current cost ratios but apply annual cost increases equally. This option calls for new water and sewer rates while maintaining current RCC ratios for all customer classes. This option also applies an equal percentage rate increase across the board and implements the key rate structure changes of the consultants.. It is important to note that within a complex cost of service model, with many variables at play and the need to adhere to consistent ratemaking principles, resulting RCCs will always vary slightly from targeted RCCs.
In July, updated costs and water volumes along with a 3 per cent inflationary rate increase were factored into the 2028 projections.
Fast forward to Oct. 27 last night, council passed a motion in favour of option 3, described as a “kick the can motion” by a number of councillors, including Councillor Steve Payne.
“This will be for the next council,” said Councillor Payne. “Who will see if we can do something with that rate down the road,” he added.
Prior to the council vote, Councillor Stacie Arden Smith asked each community member presenter which option they would choose. The majority replied that they would choose none of the three options available, instead opting for what has been dubbed “option 4.”
Councillor Rob Warburton was the only city council member to not vote in favour of the motion.
A number of councillors and community members pointed to water as a “fundamental human right,” something that came up at a previous council meeting in the summer. At that time, it was debated whether the city should supply potable water to people living at an encampment. On that issue, the council vote decided it was the responsibility of the GNWT.
Councillor Cat McGurk pointed out that the issue is complex, as many Yellowknifers who are already paying inflated rents downtown would have to bear the cost difference of the trucked water.
Councillor Garett Cochrane voted in support of the motion and was the first councillor to point out that the issue was one “for next council.” Cochrance said the debate brings to the surface questions around how the community wants the future of infrastructure to go forward – “Do we want more trucked or more piped water?” pointing out that residents seem to want neither.
Councillor Tom McLennan said it’s about the city “setting out a clear view” on “a difficult decision” where the motion had the effect of “kicking a can down the road.”
Councillor McLennan added that he was looking forward to having a more fulsome view of how infrastructure is planned and decided.
Councillor Stacie Arden-Smith recommended to send the water question back to GPC aside. Councillor Smith spoke about the “horrific” costs associated with trucked water experienced first hand going back generations and urged residents to discuss the issue with the next council candidates.
Mayor Ben Hendriksen said that although he did not agree that passing the motion translated to ‘kicking the can,” he agreed that many issues have yet to be acknowledged by the motion. But as Councillor Ryan Fequet pointed out, the city is anticipating a $1. 9 million dollar deficit, so adjusting rates now is one way to avoid increasing taxes for residents.
The councillor put forward a motion for administration to examine the possibility of other options, including one that would remove the cost of water delivery from the equation.
Councillor Fequet later withdrew the motion and instead proposed a notice of motion for the next council meeting.
