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Infrastructure plan warns of $22 million shortfall

District of Clearwater could face a $22 million budget shortfall in 20 years if it doesn’t spend more on infrastructure
8046clearwaterCmykGraphcopy
Graph shows the relative replacement cost of the four main elements of District of Clearwater's infrastructure. Total value of the four elements is $75.2 million.

District of Clearwater could face a $22 million budget shortfall in 20 years if it doesn’t start spending more on infrastructure.

That was the blunt assessment contained in the District’s infrastructure master plan recently completed by Urban Systems.

According to the consultants, the municipality presently invests $200,000 per year on infrastructure, when it should be spending $1.3 million.

The master plan recognizes that it would not be practical for capital funding to attain sustainable levels in the near term.

However, it outlines a number of steps needed to address the funding shortfall in the longer term.

For example, it gives two scenarios for water rates.

The first would keep rate increases at or near minimum. The second would be above minimum, allowing reserves to grow.

The first water rate scenario would see five per cent increases in 2013 and 2014, followed by 10 per cent increases each year from 2015 to 2019, reducing to five per cent per year from 2020 to about 2032.

This scenario would require that major distribution upgrades be delayed until near the end of the 20-year capital planning period.

The second water rate scenario would see a five per cent increase in 2013, followed by a 15 per cent increase per year from 2014 to 2018. Increases from 2019 to 2032 would drop to five per cent per year.

The second scenario would allow upgrades to happen sooner, plus would provide more flexibility if another well and/or improved treatment is needed.

The five per cent increase in water rates for 2013 included in both scenarios would amount to $16 per household.

The report points out that roads and sidewalks could be maintained at a lower level to save money. However, if the assets are allowed to degrade too much, costs could be substantially more in the long run.

General revenues would have to increase by five per cent this year, 10 per cent in 2014, 15 per cent in 2015, and 10 per cent per year from 2016 to 2019 to follow a replacement strategy.

The report recommends that, if a choice must be made, focusing on water utility rate increases rather than general revenue funded projects. Safe water and adequate fire protection should have higher priority than roads and sidewalks, it argues.

Last Tuesday town council approved an 8.5 per cent increase in water tolls plus an eight per cent increase in sewer tolls. The two increases together would amount to $45 per year for a house in Weyerhaeuser subdivision.

 

The District is presently developing its five-year financial plan. Input to let council know what the community’s priorities are is invited. An open house for a draft budget presentation and a chance to provide input will be held Tuesday, April 9, in the District hall, 2 – 4 p.m. and 6 – 8 p.m.