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New Water rates for Ottawa

  • Mon, March 04, 2019 5:32 PM
    Reply # 7199335 on 7179829

    So apparently they are no longer planning to release the spreadsheet. I can still run your numbers at the next OREIO meeting but for the official numbers you will want to call the Revenue branch after March 6th. They are supposed to get trained up but if you don't get a good answer then my contact is willing to answer your questions. Just let me know.


    Here is the official email from the city. It is helpful but not completely illuminating on your own. 

    -------------

    Christian,

    Please feel free to pass this email along.

    One thing to note before I lay out the billing structure and provide an example, the rates for the new structure have not yet been approved by city council. The date for approval of the rates is scheduled for March 6, 2019. The approval for the new structure itself was decided in October 26, 2016.

    NEW RATE STRUCTURE FORMAT

    To begin, the new rate structure has four components (three existing and one new):

    • Water Service Charge
    • Wastewater Service Charge
    • Fire Supply
    • Stormwater (new)

    These four components have a fixed annual fee (annual fee divided into per diem then multiplied by the number of days in the billing cycle) based on the following property criteria:

    • Meter Size (affects Water Service Charge, Wastewater Service Charge, and Fire Supply)
      • 15mm, 20mm, 25mm, etc
    • Property Type (affects Stormwater)
      • As provided by MPAC (Residential, Commercial, Industrial, etc)
        • Commercial, Industrial, and Institutional properties are further broken down by assessment
        • Residential has a different rate than Multi-Residential
          • Residential is less than or equal to 6 units, Multi-Residential is greater than 7 units or more
    • Property Location (affects Stormwater)
      • Urban vs Rural
    • Connected vs Non-Connected properties (affects Stormwater)
      • Connected to water supply and/or wastewater return
      • Non-Connected properties (mostly rural)

    There is also a variable component to the billing based on water consumption (Cubic Meters) split over two 30 day periods (total 60 day billing cycle):

    • Tier 1 – First 6 m3 (0 - 5.99 m3)
    • Tier 2 – Next 19 m3 (6 - 25.99 m3)
    • Tier 3 – Next 155 m3 (26 - 179.99 m3)
    • Tier 4 – All Above 180 m3 (180+ m3)

    EXAMPLE

    To provide an example of this new billing structure, I will use a property with the following criteria (most common in the City of Ottawa):

    • Residential property
    • Urban location
    • 15mm meter size
    • Connected to water supply and wastewater services

    This property uses the following consumption over the 60 billing cycle (split into two 30 day periods):

    • Day 1 to 30 – 10 m3
    • Day 31 to 60 – 6 m3
    • Total – 16 m3

    Fixed Charges (rates are examples as they have not been approved yet):

    • Water Service Charge - $18.90
      • Annual cost $115.08/365 days = $0.315 daily
      • $0.315 daily x 60 days in billing cycle = $18.90
    • Wastewater Service Charge - $16.38
      • Annual cost $99.48/365 days = $0.273 daily
      • $0.273 daily x 60 days in billing cycle = $16.38
    • Fire Supply - $7.62
      • Annual cost $46.28/365 days = $0.127 daily
      • $0.127 daily x 60 days in billing cycle = $7.62
    • Stormwater - $19.20
      • Annual cost $116.85/365 days = $0.320 daily
      • $0.320 daily x 60 days in billing cycle = $19.20
    • TOTAL FIXED CHARGES - $62.10
      • $18.90 + $16.38 + $7.62 + $19.20 = $62.10
      • These fixed charges will appear on every bill regardless of total water consumption

    Variable Charges (rates are examples as they have not been approved yet):

    Tier

    Rate

    Period 1 Consumption

    Period 1 Cost

    Period 2 Consumption

    Period 2 Cost

    TOTAL COST

    Tier 1 – First 6 m3

    (0 - 5.99 m3)

    $1.456

    6 m3

    $8.736

    6 m3

    $8.736

    $17.47

    Tier 2 – Next 19 m3

    (6 - 25.99 m3)

    $2.910

    4 m3

    $11.64

    0 m3

    $0.00

    $11.64

    Tier 3 – Next 155 m3

    (26 - 179.99 m3)

    $3.202

    0 m3

    $0.00

    0 m3

    $0.00

    $0.00

    Tier 4 – All above 180 m3

    (180+ m3)

    $3.587

    0 m3

    $0.00

    0 m3

    $0.00

    $0.00

    TOTAL

    $29.11

    Total bill under new rate structure is $91.21

    • Fixed Charges = $62.10
    • Variable Charges = $29.11

    SUMMARY

    Under the new rate structure we cannot conclude that residential properties will definitively see an increase in their bills and commericial properties will see a decrease in their bills. However, the rate structure was designed in such a way that the average property will not be affected. If a property consumes less water than the average, there is a possibility that they may see a higher bill than what they used to receive with the old rate structure. Conversely, the opposite is also true where a property that uses more water than the average might see a decrease in the amount of their bill when compared to the old rate structure.

    Let me know if you have any further questions.


  • Sat, February 23, 2019 9:37 AM
    Reply # 7180357 on 7179829
    Mary Richardson (Administrator)

    Thanks Christian, this is very helpful and we appreciate your offer of help with calculating upcoming Water costs.   

    Cheers, Mary. :)

  • Fri, February 22, 2019 7:40 PM
    Message # 7179829

    As I'm sure you have seen by now (in your recent bills), Ottawa is now moving to a new water rate structure. It is a combination of fixed charges and tiered usage charges. The more you use, the more you pay at each tier. The obvious concern is that MURs on a single meter (ie. most of them) use way more water per meter than a single family home so the fear was that we would see significant cost increases on MURs and indirectly push the cost on to tenants.

    DON'T PANIC!

    I managed to find my way into the city finance group to discuss how this would work. They shared the formula with me and what you will find is that for MURs, the costs will actually go down unless you have a really huge complex.

    What is actually happening is that they are shifting most of the cost to fixed fees (we only had one before; fire supply) with a smaller variable component. The rationale is that due to water conservation measure (promoted by the city), people were actually using less water and thus they had a deficit on the sewer infrastructure side which actually doesn't scale well based on water usage.

    So now you will have 4 fixed charges based on the MPAC defined building type, assessment value of the property and meter size. Namely the following types and depending whether you are using them:
       - Water
       - Waste Water
       - Storm water
       - Fire Supply

    I ran  real data scenarios based on a sample of buildings I have including a 10 unit, 4 unit and my residence. Both MURs actually saw a reduction in cost (~10% savings) and my residence went up.  Realistically, the less water you used the more likely you are to see an increase. The intent by the city is an efficient single family home will see an increase but it won't be significant in absolute dollars. Mine was about $25 per billing period (60 days). And with most meters being on single homes it covers the usage shortfall. 

    What they are trying to achieve is a predictable revenue flow to support the infrastructure costs.

    The city plans to release a version of this spreadsheet in about a month to allow people to calculate the impact on them. I have a preliminary one so if they have not yet released the official one and If you have your data handy at the next OREIO meeting, I will be happy to run your scenario for you during the breaks. I will just need to know what type of building it is (how many units), what meter size you have, your assessment value and your monthly or billing usage average for the year.


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