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Cleaning up the Halifax Harbor may cost municipal water users more than originally thought.
Metro residents will be asked to put their money where their sewage is, and fork out $56 million in higher water rates over five years to make up for a funding shortfall in the citys sewage-treatment project.
If approved by the Halifax regional council, the average residential water bill will go up $12.80 a year for five years, or an extra $3.20 every quarter, to help make up the shortfall in the $315-million sewage-treatment project. (The average cost is based on an annual consumption of 256 cubic meters of water.)
The increase, 25 cents per cubic meter, to the pollution-control charge on city water bills is to be phased in at five cents each year for five years beginning in 2004. The result in 2008 will be a total increase of $64 on annual water bills.
Mayor Peter Kelly said while the increase is "unfortunate," thats the price of getting the project done.
"The public has made it very clear that its time to move forward and commence the cleanup process," Kelly said.
Last month, the city learned funding from the provincial and federal governments for the project would come up short.
While the province kicked in the $30 million it was expected to contribute, spreading the payment out over 15 years resulted in a net present value of only $19 million. Add that to the $30 million federal contribution, and the city is left with $56 million less than the $105 million it originally sought.
Kelly said he would like staff to look at increasing fees new homeowners pay to hook up to the sewage system to help offset capital costs, as well.
Sewage-treatment project manager Mike Labrecque said the water-bill increases would allow the city to build all three sewage-treatment plants it originally envisioned on schedule.
"It covers, for the most part, what the contributions from the other levels of government ought to have been," Labrecque said.
He said increasing water rates is the fairest way for the city to make up the shortfall, since it only affects people actually using municipal water and sewer services.
A general tax-rate increase would have affected all taxpayers, even those with their own wells and septic systems, Labrecque said.
Council could decide not to approve a water-bill increase, and instead take longer to build the three plants, he said. But the city would then have to pay a penalty to Halifax Regional Environmental Partnership, the private consortium overseeing the project.
Labrecque said the penalty would be about $17 million to put off building both the Dartmouth and Herring Cove plants, and $8 million to defer just the Herring Cove plant.