An increase to water rates has some residents questioning whether the raise is justified.
The flat rate and service rate for water was increased by five per cent recently by town council as part of the interim budget while the North Red Deer River Water Services Commission — where the Town of Ponoka acquires its water — did not increase its rates charged to municipalities.
Acting CAO Betty Quinlan said that while the town will see some extra revenue, water and sewer usually operate at a profit. ”We’ve always had a profit component in the water.”
Selling water and sewer at a flat rate would mean the town would still have to account for $1.5 million of the $2.8 million operational budget, said Quinlan. Managing those costs is handled by operating at a profit and ensures utilities can be serviced.
One question she received was over the flat rate increase and whether residents and businesses should pay more when the Town of Ponoka does not.
Quinlan said the funds have been allocated in the capital budget and if councillors decided to drop the rates, which they can do when they pass the interim budget in April, then the money will need to be found from somewhere else. Or, “If we take it out of the budget, we’d have to cut.”
The profit component of the utilities allows the town to run capital projects each year, she added, and the money is transferred to the capital budget.
Administration has been in contact with the City of Lacombe and the Town of Blackfalds to determine how those municipalities deal with a situation such as this. Quinlan said Ponoka’s rates are slightly higher than Lacombe and slightly lower than Blackfalds.