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City overcharges for water and sewer

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13Jan

By: Graham Lane
Published: Winnipeg Sun, January 13, 2017

No wonder building outside the perimeter is popular. Winnipeg’s water utility rates continue to soar,
and an unjustified impact fee looms while frontage levies and property taxes increase. City water
bills will jump 8.9% in 2017, following 9.2% in 2016 – at least four times inflation. Water bill increases
are as much about subsidizing the City’s general operations as addressing utility needs. The rising
cost of water hits property owners and renters: the poor and large families hardest.

With car insurance going up by 3.7%, Hydro threatening more unending hikes, and City property tax
and frontage levies climbing, close to 10% annual water service bill increases could be the straw that
breaks the camel’s back. City council runs an annual scam, raiding its water utility to hold property
tax increases to inflation. While Winnipeg’s council pushes up water rates well beyond inflation,
Cartier Regional Water Co-operative sets a 1.3% rate hike for its beyond-the-perimeter customers,
Bowman continues the pretense of holding down property tax increases to meet his election
promise. Easier to bilk customers by stripping money off the water utility than take responsibility for
an inability to hold down tax increases validity through actually achieving more efficient less costly
operations. And, ripping off households keeps the water utility’s balance sheet weak, allowing the
City to pressure the federal government for more taxpayer-backed infrastructure money. Of course,
more federal money works for the Province as well as the City.

How does the City get away with it? Except for Winnipeg, provincial legislation has the Public
Utilities Board set water rates for municipalities; PUB regulation would not let the City skim money
from its water and sewer utility.

Other municipal water and sewer utilities have to follow PUB’s rate decisions, and PUB doesn’t allow
cross-subsidization of general municipal operations through excessive water bills. All other
municipalities scramble for operating efficiencies to hold down their property taxes. The revenue
stripped from Winnipeg’s water utility is money that, if needed, should be directed to fix, update and
expand water and sewer treatment plants and piping.

The provincial government plays a major role in Winnipeg’s scam, regularly ignoring PUB’s strong
and repeated recommendation that the City of Winnipeg’s exemption from PUB water bill rate-setting
be removed. For years, successive city councils have trumpeted apparent success in holding down
or, before Bowman, freezing property taxes. The perception sought through the water bill scam is
one of efficiency and competency. Were the self-accolades for holding down property tax increases
deserved? No.

The City has run its scam for years. Absent the annual raid, property tax increases would have been
annual and much larger. In a 2011 review of the City’s water utility PUB found that so-called
dividends and other cross-subsidies raided the city’s utility to help the city’s general fund to the tune
of at least $45 million a year, a subsidy that would not be allowed for any other municipal
government in the province. If anything, the skimming continues even larger.
PUB concluded its review with a recommendation the Province end the City’s exemption from PUB’s
water and sewer rate-setting.

The scam should stop, either by way of City Council or, if not, by the Province.

Graham Lane leads Manitoba Forward (manitobaforward.ca).

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