Saturday, July 28, 2007

Moving towards user pay

Some people seem to have gotten the wrong impression of my previous post comparing water rates across municipalities. You can read the comments and I've received numerous emails to go with, both for and against.

I acknowledge that there is some degree of comparing apples and oranges, but quite frankly I'm not ready to accept the various WUC officials and politicians when they say the reason for the dramatic rate increase is that Windsor is the first to face their Municipal Water/Sewer infrastructure deficit.

Read today's Windsor Star article - they can't even get their stories straight two days in a row. Now we're being told that there was no diversion, we were just underspending to the tune of $10 million per year. How many "dividends" did we receive from Enwin/WUC in those years of underspending? Have we really been running a "Pay as you Go" budget or a slightly modified version, buttressed by transfers and reserve shuffling.

Today's Star article reveals that 1000 homes were not being billed for 5 years for their water service. This was discovered in 2005. Why are we only finding out about this loss of $3.5 million in July of 2007?

There is no doubt a lot of hard work has gone into fixing what ails at the utilities. Enwin/WUC paid out over $150,000 to Councillors for their attendance at meetings. The problem, as with many other issues in Windsor, is that all this has been happening behind closed doors for the last two years. Now that there is no other choice but to drastically hike rates, we're simply expected to accept the explanation given and pay.

Sorry, but that's not good enough, especially when over a three day period those responsible for delivering the news can't even deliver consistent and clear information.

User Pay

The single biggest issue with our water system as it currently stands is that revenue is mainly based on fixed charges. There is absolutely no incentive to conserve.

This is an example of the rates as they will be on August 1st, and what I could save if I reduced 3 cm per month:

Windsor 2007 21cm 18cm Savings
1. Meter Fixed Charge $16.84 $16.84 $0.00
2. Water Usage @ $0.266/cm $5.59 $4.79 $0.80
Water Main Replacement Levy (45% of 1 and 2) $10.09 $9.73 $0.36




Lou Romano Plant Upgrade and Expansion Levy (10 % of 1 and 2) $2.24 $2.16 $0.08
Sewer Surcharge (150% of 1 and 2) $33.64 $32.44 $1.20
Total Per Month $68.40 $65.97 $2.43
Total Per Year $820.79 $791.58 $29.21

Reducing my water usage by 3 cm (14.3%) produces a savings of $2.43 (3.6%).

Next, lets look what happens if we leave the Fixed Charge where it is now - at $9.56 per month and raise the Water Usage rate to $0.613 from $0.266.

Windsor 2007 User Pay 1
21cm 18cm Savings
1. Meter Fixed Charge $9.56 $9.56 $0.00
2. Water Usage @ $0.613/cm $12.87 $11.03 $1.84
Water Main Replacement Levy (45% of 1 and 2) $10.09 $9.27 $0.83




Lou Romano Plant Upgrade and Expansion Levy (10 % of 1 and 2) $2.24 $2.06 $0.18
Sewer Surcharge (150% of 1 and 2) $33.65 $30.89 $2.76
Total Per Month $68.42 $62.81 $5.61
Total Per Year $821.05 $753.74 $67.31

The bill is virtually the same, I've simply shifted the money from the Fixed Charge to Water Use. Now that same 14.3% decrease in usage saves me 8.2% or $5.61 per month. Things are getting better.

Next let's take a look at what happens when you make the Sewer Surcharge user pay:

Windsor 2007 User Pay 2
21cm 18cm Savings
1. Meter Fixed Charge $9.56 $9.56 $0.00
2. Water Usage @ $0.613/cm $12.87 $11.03 $1.84
Water Main Replacement Levy (45% of 1 and 2) $10.09 $9.27 $0.83




Lou Romano Plant Upgrade and Expansion Levy (10 % of 1 and 2) $2.24 $2.06 $0.18
Sewer Usage @ $1.602 $33.64 $28.84 $4.81
Total Per Month $68.41 $60.76 $7.66
Total Per Year $820.96 $729.08 $91.88

The same 14.2% reduction is now worth 11.2% a month. We're making progress.

Let's get rid of the Fixed Meter Charge:

Windsor 2007 User Pay 3
21cm 18cm Savings
1. Water Usage @ $1.068/cm $22.43 $19.22 $3.20
Water Main Replacement Levy (45% of 1) $10.09 $8.65 $1.44




Lou Romano Plant Upgrade and Expansion Levy (10 % of 1) $2.24 $1.92 $0.32
Sewer Surcharge @ $1.602 $33.64 $28.84 $4.81
Total Per Month $68.41 $58.63 $9.77
Total Per Year $820.86 $703.60 $117.27

Wow! A 14.3 % reduction in water usage now gives me a 14.3% reduction in my bill. The special levies now work properly. They are also based on your usage. Once the reason for the levy no longer exists, your bill can be further reduced.

(Note: the various rates I used are not exact to the last penny, I did this really quick in a spreadsheet simply to demonstrate the value of user pay).

Under the current system my bill at 18 cm is $65.97. Under a User Pay system it would be $58.63.

Why should people be forced to subsidize someone elses higher use? Use more pay more, use less, pay less.

Now people will be motivated to disconnect that downspout from the storm drain and collect water for their garden and flowers. Low flow faucets and toilets will become very popular. Do you really need to do that 1/4 load of laundry or can you wait until you have a full load? Better yet - what will happen to sales of front end loader washers, which use far less water than top loaders. Same goes for dishwashers.

Suffice it to say, there are numerous ways to reduce our water usage and save money. We simply have no incentive to do it.