The principles behind water billing, especially in mixed-density and mixed-use municipalities like Central Elgin, can seem daunting, but few simple concepts underpin our water rates: cost recovery, equity, and conservation. Considering these factors can help you understand the balance municipalities strive to achieve when managing water and wastewater costs.

Cost Recovery: The Foundation of Water Billing

Water billing rates are designed to ensure that the yearly operational costs of our water supply system are fully covered. This includes quality testing, treatment, distribution, and maintenance of the system, as well as all the materials and staff time that go with them. Cost recovery is also about planning for the future, setting aside funds for upgrades and expansions to meet the growing needs of our communities.

Equity: Fairness in Billing

Equity in water billing ensures that the system is as fair as possible to all types of ratepayers. This means considering the needs of year-round residents, seasonal homeowners, and businesses. The challenge lies in finding a billing structure that doesn’t apply unfair burden to one group over another – and defining what fair is can be a real problem – while acknowledging the shared responsibility for maintaining water and wastewater infrastructure.

Conservation: Encouraging Responsible Use

Keeping our municipalities sustainable for future generations is an important goal for municipal leaders. In water rates, that means looking for pricing models that encourage everyone to use water responsibly. By making users more aware of their water consumption and its costs, the billing system incentivizes behaviors that conserve water. This helps to protect our valuable land and water resources, and can indirectly reduce water costs by reducing demand on the system for new capacity.

Balancing the Billing: Base Rate vs. Volume Rate

In Central Elgin, water bills comprise two parts: the base rate and the volume rate. The base rate is a fixed charge that covers the cost of making water available to your property, regardless of how much is used. The volume rate is variable and depends on the amount of water you consume.

• Increasing the Base Rate: This provides a predictable revenue stream for water system maintenance, but does little to encourage conservation. It also doesn’t allow much flexibility for families looking to reduce their bills through water-saving measures.
• Increasing the Volume Rate: This promotes conservation by linking water use to cost. However, Port Stanley has more seasonal homes than most villages. Increasing volume rates instead of base rates means that year-round residents pay substantially more in a year, compared to those with additional luxury properties used less frequently, even though the systems need maintenance in every season.

A Balanced Approach: Combining Base and Volume Rate Adjustments

Adjustment to both the base and volume rates can be a more balanced solution. This approach promotes fairness by distributing the costs more evenly among all users, while still encouraging conservation by making the cost of higher consumption more apparent.

By increasing both rates instead of leaning to one or the other, Central Elgin can avoid sudden price jumps, making water bills more predictable, and still meet our requirements to prepare for necessary future spending. This agenda’s proposed two-pronged increase to billing is designed support a system that is fair, sustainable, and conservation-oriented, providing for our community and the environment for years to come.