Greenwood utility looking to hike water rates, even with surplus

BY NANCY KELLY

Kings County Register

Kings County defended its case to raise rates for customers of the Greenwood Water Utility at a Nova Scotia Utility and Review Board (URB) public hearing in Greenwood December 19.

A water rate study for the utility, which serves 567 customers in Greenwood and on Sandy Court in Aylesford, was conducted in August of 2007. The study resulted in proposed increases to residential water rates for the years 2008/ 09, 09/10 and 2010/ 11, averaging 12.7, 13.1 and 3.1 per cent respectively. The current average quarterly billing for residential customers of $71.98 would rise to $94.86.

Mr. W. Gates, whose firm conducted the rate study for the County appeared before the one-man review panel to answer questions about the increase. He explained “capital costs and increased environmental monitoring associated with the life cyle improvements and environmental compliance regulations are the primary drivers of new costs” for the 2008/ 2011 period. He summarized several “major and necessary” capital projects on the horizon, including replacement of the main transmission line and installation of an ultra-violet treatment system for the Greenwood system and a new well and treatment system for Aylesford’s Sandy Court system.

Gates said, while the utility is currently in “good financial health,” the proposed upgrades to the public water system will drain away any accumulated surplus very quickly. The utility posted a surplus of $271,000 in its last fiscal year. Gates also pointed to the considerable costs associated with the extension of the water system to Bowlby Park subdivision in 2005 “as a root cause of the rate increase request.”

The hearing was attended by 15 people, of which the majority were URB and Kings County representatives. Several members of the Greenwood village commission were on hand and vice chairman Frank Martyn acted as the formal intervenor for the village. Central Annapolis Valley Chamber of Commerce (CAVCC) president Byron McDonald also addressed the board on behalf of its membership. Two members of the public were in attendance.

Village officials, business reps see ‘drastic’ hike

Neither Martyn or McDonald were supportive of the rate increases, which will also see non-residential metered services increase between 14 and 17 per cent in the next two years and by three per cent in 2010/ 11. The annual fire protection charge paid by the municipality is also proposed to be amended from the current rate of $81,261 to $114,028 by 2010/11, an increase of close to 40 per cent. Martyn expressed concern such a drastic hike could trigger an increase in the annual fire protection rates paid by area residents and said any cost increases could negatively affect future growth in the village.

In his written submission to the hearing, McDonald noted “the Central Annapolis Valley Chamber of Commerce believes that the rate increase that the Greenwood Water Utility is seeking is excessive, unnecessary and is based on suspect accounting.”

Pointing to the utility’s recent profit margins, he suggested “improvements to the distribution mains and trunk lines can be accomplished using the current rates, depreciation accounts, and transfers from the surplus.” He highlighted discrepancies between the utility’s annual report and the 2007 rate study and questioned data regarding the costs of projects, services and upgrades to the water system.

Acting as review board chairman, Murray Doehler followed McDonald’s presentation with a series of financial questions relative to the utility’s operations and plans for capital improvements. He also requested the utility provide clarification on many of the points raised by McDonald on behalf of the CAVCC.

The water rate study, public submissions from the hearing and follow-up material will be reviewed by Doehler before the URB renders its decision on the proposed rate increase, expected in March.