By Cecilia Nasmith/Today’s Northumberland
Cobourg council endorsed recommendations of water and wastewater rates at Monday’s committee-of-the-whole meeting.
The increases, as recommended by Lakefront Utilities Chief Executive Officer Dereck Paul, would be a 7.2% base-rate increase, a 7.3% increase on consumption rates.
Paul addressed council with Sean Michaels of Watson and Associates Economists Ltd., the company that prepared the 2020 water rate and development charges study. At the time, Michaels said, it was assumed development charges should be funded through a combination of development charges and front-end financing on the developer’s part.
Fast-forward to new provincial legislation limiting the municipality’s ability to impose development charges. Any shortfall must now be covered through rate and tax hikes.
Given the date of the study, Paul had an additional recommendation – a look next year at the updated situation to help adjust rates going forward.
Compared to 10 surrounding municipalities, he said, Cobourg’s rates are the third-lowest, he pointed out. And at an average monthly bill of $57.53, it is even lower than Northumberland’s other municipalities (the most expensive of which is Grafton at $97.98 monthly).
Given so many current realities – from a prospective 6.6% tax hike to the inflation that hits everyone with every purchase – Councillor Adam Bureau wondered if the rate hike might be put off for just one year.
“I think it would have ramifications to reserves we are building for important capital expenditures over the next couple of years,” Paul said.
“Are you saying even with this rate increase we are still not going to be prepared for the costs coming down the pipeline in the next couple of years?” Mayor Lucas Cleveland asked.
“I couldn’t put it better,” Paul agreed.
In other words, Cleveland continued, “previous councils did not get us to a place where we had enough money in the bank to prepare for this, so we are having to make decisions none of us enjoy to prepare for the future and ensure future councils are not in the situation we are in.”
The changes mean a 2024 capital budget of $8,474,495 and an operating budget of $3,645,547. And among those capital expenditures, Paul said, is the building of an elevated water tank and booster pump to serve Cobourg’s east end that has a budget of $17-million – up from an original budget of $12-million, representing a 43% increase.
Paul recalled that they once tried to hold annual increases to the 4% range.
“It was inadequate. We are playing catch-up,” he said.
Asked what a 2024 review might cost, Paul gave a $60,000 estimate.
“For a $60,000 impact, I think it’s money well spent,” he said.
It was Councillor Brian Darling who made the motion to include the updated study, along with the rate increases, but Deputy Mayor Nicole Beatty expressed concerns about the cost – which Treasurer Adam Giddings pointed out was estimated several years back. Giddings thought the updated cost might be closer to $80,000, not including the staff time that would have to go into it.
Beatty made a motion to refer the cost to the budget process, rather than giving a blanket approval to the updated study, and it was passed.
Mayor Cleveland revealed later in the meeting that he had discussed this cost with Paul, and had confirmed that this cost – should it be incurred – would be covered half-and-half by the town and by LUSI.