Plans have been approved for the Chatham-Kent Public Utilities Commission to move forward as it faces capital costs forecast to exceed $1 billion during the next decade.
Plans have been approved for the Chatham-Kent Public Utilities Commission to move forward as it faces capital costs forecast to exceed $1 billion during the next decade.
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Both a financial plan and business plan were approved at Thursday’s commission meeting, held online.
PUC general manager Darren Galbraith said consultant Watson and Associates used information from the rates study to develop and finalize and eight-year financial plan covering 2024 to 2031.
In October, the commission learned 2025-34 water capital costs, adjusted for inflation, are pegged at about $870 million, with wastewater capital costs estimated at $305 million, according to a Watson and Associates rates study.
For an average home, the annual water bill would rise from $604.64 to $1,156.71. For wastewater, it would jump from $629.72 to $1,199.37.
“The preparation of a financial plan is a key requirement for licensing and long-term financial sustainability for municipal residential drinking water systems,” Galbraith said Thursday.
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“It shows the planning to ensure that adequate finances are available to cover both day-to-day operation costs as well as the cost of maintaining and upgrading municipal water systems,” he added.
Financial plans must be developed for a minimum six-year period and must contain details about system’s financial position, financial operations and cash flow, Galbraith said.
He added financial plans must be updated in conjunction with every application to renew a water system’s drinking water license, which is every five years.
The current PUC municipal drinking water license expires Aug. 26, 2025 and the deadline to submit an application for license renewal is Feb. 4, 2025, the commission heard.
The 2024-2027 business plan approved Thursday was developed in consultation with Chatham-Kent’s finance department, Galbraith said.
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“It was decided to develop a four-year plan, which will offset the election cycle by one year,” he said.
He added this will allow the PUC business plan to be passed by the current commission and followed into the first year of a potential new commission.
Approval of the multi-year budgets and rates allows for “a more long-term and strategic planning process to occur rather than based on annual planning,” Galbraith said.
Although the concept of a multi-year rate approval is supported by the commission, a report will be required to be presented at the beginning of each year to seek an approval of new water and sewer rates by law, Galbraith said.
Approval for the 2025 rates and fees by law will be sought at the Jan. 16, 2025 PUC meeting, he added.
Citing future costs being faced by the utility, South Kent Coun. Ryan Doyle asked if the rate increases “set us up better than we currently are?”
Galbraith said, “We do need these rate increases in order to be sustainable for any growth or lifecycle (costs) going forward.
“It’s critical we get the revenue needed to fund all these projects,” he added.
With files from Trevor Terfloth
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