Tantramar kicked off budget season last week when treasurer Michael Beal presented the proposed water and sewer utility budget at a special meeting on October 24.
The costs to run Sackville and Dorchester water and sewer services are separate from the town’s general operating budget. Both services are funded by utility bill payments, in Sackville according to metered water use, and in Dorchester with a flat sewer and water tax rate. For both the village and the town, Beal is proposing a 6.7% increase in those fees for 2024.
Increased fees are not as high as they could be, considering some $72,000 savings in administration costs, thanks to the amalgamation of Sackville and Dorchester utility operations. That savings is balanced out with a cost increase for water services in Dorchester.
In August, council approved a move to hire Veolia Water Technologies to run the Dorchester water treatment plant. The global water services company is also on contract to operate the Sackville and Moncton water treatment plants. Beal told council that change accounted for an increase in water services costs of about $110,000.
Without the amalgamation savings, hiring Veolia in Dorchester “would have resulted in a straight rate increase for those in Dorchester,” Beal told council. “But because of the combined the savings we had, in certain areas, we were able to do this with a minimal increase in rates.”
Both Sackville and Dorchester water customers could see the same percentage increase in their rates (6.7%), but it will break down differently for users on either system.
About 38-46% of Sackville water customers pay a minimum charge for their service. That minimum charge will go up by about $36 in 2024, to about $579 annually. Most users will pay more than the minimum charge, according to how much water they use.
The roughly 200 customers in Dorchester all pay the same rate no matter how much water they use. They will see an increase of nearly $48, to a new combined flat charge of about $763 per year.
“At some point in time, the council may wish to have conversations [about] whether Tantramar wants to be a fully metered system or not,” Beal told council, adding that a full evaluation of the options would have to take place. “There’s no money in the budget to do that in 2024. But it would have to be a discussion.”
Beal also showed councillors the breakdown of where the combined Dorchester and Sackville utility $2.7 million dollar budget gets spent.
Detail from Tantramar 2024 budget draft presentation, October 24, 2023.
Admin costs account for 14% of the utility expenses for 2024. Infrastructure costs represent 32% of costs, with about 20% going to paying off debts for past projects and another 12% going to a savings plan for future projects. Engineering costs take up 5% of the budget, and the remaining 49% goes to actual water and sewer operations. Water services, including distribution and treatment, are the most expensive taking 35% of the budget, leaving 14% spent on sewer services.
Sewage lagoon savings plan
Sackville has an ambitious savings plan in anticipation of a project needed to upgrade the town’s central sewage lagoons. In 2024, Beal is suggesting the town sock away another $320,000, an amount that would bump the fund up to $1.58 million.
An annual sewer treatment charge that increases every year was first charged to Sackville customers eight years ago, said Beal. In 2021, the charge was $200 and has increased by $40 a year since. In 2024, the charge will be $320 per water customer in Sackville, and it will increase up to $400 by 2026.
“That money is being put in through resolution of council every year, into the utility half of a reserve fund,” said Beal. “We don’t have a firm estimate, but lagoon upgrades for the main lagoon will be anywhere from five to $10 million.” The intention is to apply for federal or provincial infrastructure funding to help pay for the project, but the municipality will likely be responsible for at least a third of the cost.
Beal said if the utility had to borrow its portion of the project all at once, that “would have resulted in a 50% increase in rates in one year… So what we began eight years ago was to slowly increase the rates and put that money away.”
Beal told council that the town is in the awkward phase of knowing it has a major project that will require federal or provincial help, but without being able to apply for funding until design and engineering work is done to make the project “shovel ready”. “At some point, we’re going to need to begin the design of what our lagoon is going to need to look like,” said Beal. “And if we decide to do so in 2024, this is the money that we would have to use in order to do so, and it would result in a reduced deposit into our reserve fund in the year 2024.”
Starting in 2025, Beal said the town will also need to start putting away money for future Dorchester lift station upgrades.