Ontario Pipeline - Summer 2015 - (Page 26)

FEATURE | HIGH VOLUME USERS THE SMALL TOWN DILEMMA: FINDING THE WIN-WIN FOR INDUSTRY AND ECONOMIC DEVELOPMENT BY TRISH JOHNSON & ALAN PERKS, R.V. ANDERSON ASSOCIATES LTD, OTTAWA T he balance between water rate setting and economic development is an ongoing challenge for many towns across Canada. It is clearly a dilemma if a municipality undercharges for water, while at the same time needing to retain the local jobs and tax revenues. This is especially true for small towns with even a few High Volume Users (HVUs). 2007 Perth Water Consumption Breakdown Perth Soap (16%) Perth & Smith Falls District Hospital (3%) Central Wire (3%) Lanark Lodge (1%) 3M Canada (1%) Commonwealth Historic (1%) Theory versus Practice In an era where Best Practices prevail, water is to be sold as full cost recovery, but in practice this is not always the case. In some towns, historical rate structures that include declining block rates for industry have continued for decades, in spite of regular rate reviews. This means that, sometimes unwittingly, a town is essentially offering a subsidy to the largest users who are also the biggest load on the local infrastructure. The economic implications can be serious, not only in terms of revenue shortfalls, but also excessive O&M costs on both the water and the resulting wastewater side. Understanding financial implications in a broad municipal context is needed to challenge historical rate structures and the old way of doing things in order to get to full and fair user pay costs. Unfortunately, such an approach is seldom considered by novice staff and councils, at least not until something goes awry. Other Water Use (76.3%) Perth Soap (16%) Commonwealth Historic (1%) Perth & Smith Falls District Hospital (3%) Other Water Use (76.3%) It's important to know that on the capital side, costly plant expansions and upgrades can be triggered by one or two industrial HVUs who, in turn, may be responsible for as much as 40 per cent of a town's water production as the existing municipal plant reaches full capacity. This is not an unusual situation. That 40 per cent, coupled with UnaccountedFor Water (UFW) of even 15 per cent, represents more than half of the local plant capacity which is not available for rate-paying residents or planned growth. Analysis of both the water and wastewater 26 | O N T A R I O P I P E L I N E | SUMMER 2015 Central Wire (3%) Lanark Lodge (1%) 3M Canada (1%) side is needed to identify and assess the real system cost drivers. Here is where the economic development factors come into play. Neither the municipality nor the industries involved may have the will or the resources to explore mutually beneficial solutions to the industrial water use. Further, the town may feel concerned about potential job losses and/or plant closures if water rates are increased to achieve full cost recovery, or if Best Practices Sewer Surcharges were to be applied. The public does not understand the intricacies of industrial water use,

Table of Contents for the Digital Edition of Ontario Pipeline - Summer 2015

From the Publications Chair
The OWWA Report
The OMWA Report
The OWWEA Report
From Our AWWA Director
Water on the Water: Ontario’s Water Conference and Trade Show
Conference Sponsors
2015 Fuller Award
2015 OWWA Awards
Student Art Awards
When Big Users Cut Back, Utilities Left Scrambling
Small Town Dilemma
Committee Reports
Certification Corner
Calendar of Events
Welcome New Members
OWWEA Member Listing
OWWEA Member News
Index of Advertisers

Ontario Pipeline - Summer 2015