With capital costs for water and wastewater expected to total nearly $1.2 billion in the next decade, Chatham-Kent’s public utilities commission is bracing for large rate hikes for users.
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During Thursday’s meeting, commissioners heard that water capital costs, adjusted for inflation, from 2025 to 2034 are pegged at approximately $870 million, with wastewater at $305 million, according to a rates study from Watson and Associates.
For an average home, the annual water bill would rise from $604.64 currently to $1,156.71. For wastewater, it would jump from $629.72 to $1,199.37.
Byron Tan, a consultant with Watson and Associates, said the analysis considered the PUC’s future asset management needs, noting replacement infrastructure, or rehabilitative work, is needed due to age or other factors.
“The largest components of these are typically attributed to your (water) treatment plants, particularly we have the treatment plant in Chatham,” he said. “That alone is well above the quarter of a billion dollars in terms… of an actual gross cost estimate.
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“(For wastewater), this includes station upgrades, various other pumping stations, inflow and infiltration reductions, wastewater mains, et cetera.”
West Kent Coun. Lauren Anderson questioned how the forecasted costs reached this level, expressing concern for residents and businesses.
“It just seems that a lot could have been better funded earlier,” she said.
Gord Quinton, municipal treasurer and chief financial officer, said high inflation in recent years has impacted the price tag for capital projects.
“This is a lot of catch-ups now that the PUC’s faced,” he said. “Projects that were projected to be $10 million projects we’re now talking about $40 million projects in some cases.
“Whether we could have better forecast that in the 2019 study and had a little bit more in reserves… in hindsight, yeah, we should have been preparing better.”
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Anderson wondered if it was possible to cut some projects from the list, or at least take another look at the PUC master plan “of what we have and what really needs to be done.”
She asked that a letter be sent to senior levels of government about the cost pressures.
“Obviously, I don’t think we’re going to be the only municipality that’s in this position,” she said. “The lack of support from upper levels of government… is really starting to take a major effect on our ratepayers and our taxpayers.”
Given the rising costs, along with expected community growth, Mayor Darrin Canniff entered a motion to look into the governance structure of the PUC.
He said increasing technical requirements require more expertise than the current council members can provide.
“The PUC was formed when we amalgamated and we have not done any review of how we govern,” Canniff said. “We have seven people from council sitting on here. There’s no experts on water/wastewater sitting on the board.
“What are the best practices for PUC from a governance perspective?”
His successful motion, which will now come before council, will ask municipal administration to bring a report recommending a consulting firm to perform a review, with options to provide an “ideal governance composition” and legal structure.
If approved, consultant fees would come from PUC reserves.
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