When we drive our car, we consume more than the gas in the tank. There is the wear and tear on the tires, the shocks and the engine. This wear and tear leads to maintenance costs until eventually we need a new car.
When we turn on our tap, we consume more than the water in the pipes. There is wear and tear on the pipes, the valves and the pumps. This wear and tear leads to maintenance costs until eventually we need to replace the infrastructure.
Following the May 2000 water tragedy in Walkerton, Justice Dennis O’Connor released his Report on the Walkerton Inquiry. The report recommended that the provincial government require all owners of municipal water system to obtain a licence for the operation of their water systems and that those municipal owners be required to submit a Financial Plan as a condition of obtaining this licence.
We have done that.
Justice O’Connor identified financial planning as necessary to ensure that water systems become self-financing and sustainable. The Financial Plans would ensure that systems have adequate funds to finance both ongoing operational costs and infrastructure repairs and capital upgrades as required.
Sustainable financial planning has two components:
- “full-cost accounting” of the water system (including the long-term infrastructure needs) to determine the true cost of providing safe water
- “full-cost recovery plan” to determine how the municipality will raise the funds necessary to cover the full costs
The Financial Plan submitted to the Province called for a 10% increase in water and wastewater rates for 2010, 2011, 2012, 2013.
What does this mean?
It means that we are moving towards a point when every time you turn on the tap that you aren’t just paying for the water but you are also paying for the wear and tear your water use is having on the infrastructure. This represents the full cost of the water that you use. In this way, the City will have the funds to maintain and replace the pipes, valves and pumps to keep that water flowing to your home.