Water and Wastewater Rate Study Frequently Asked Questions

 The goals and objectives of the study are as follows:

1. Carry out a cost-of-service analysis to:

• Determine the funds required to sustain the City’s water and wastewater infrastructure over the next 10 years using existing 10-year capital and operating plans.
• Determine how to best recover the above costs, including re-evaluating the fairness of the current rate structure and charge to the end user as well as identify other potential revenue sources.

2. Educate Council and City staff on the concept of full-cost recovery of the water and wastewater programs and the importance and costs of achieving full-cost recovery.

3. Evaluate the cost of a high-consumption forgiveness program and its potential impact to the water and wastewater rate.

 The City’s water distribution and wastewater collection infrastructure is ageing. This increases demand for repair, maintenance, rehabilitation and/or replacement, for which sustainable financial resources are required to continue to ensure safe and efficient water and wastewater systems.

Reviews are generally undertaken by municipalities every few years or on an as-needed basis to ensure the existing rate structure continues to be the most appropriate. Over time, regulations, legislation, budgets, capital requirements, consumption trends and projections, and the goals and objectives of the municipality may change, which may result in the need to review the rate structure.

In response to the global COVID-19 pandemic and to support citizens, Vaughan City Council and York Region Council canceled the planned 2020 water and wastewater rate increase. Rates remain at the 2019 level. The following table summarizes the existing rates:

In 2020, approximately 66 per cent of the water cost and 80 per cent of the wastewater cost is related to the Region’s treatment costs.

One cubic metre equals 1,000 litres of water. A typical bottle of water is 500 millilitres. This translates to one cubic metre of water equaling 2,000 bottles of water.

What process and analysis will be undertaken to arrive at the proposed 2021 water and wastewater rate structure?

In order to effectively determine a new rate structure, the City will evaluate:

• Existing practices, costs and revenue sources.
• Industry standards and best practices for establishing water and wastewater rates.
• Rate structures used across Ontario.
• How the rate structure will affect different consumer classes.
• Feedback from community engagement.

And develop evaluation criteria to assess alternative rate structure options.

The Water and Wastewater Rate Structure Review began in April 2020 and is expected to be completed by August 2020. Proposed recommendations are expected to go to Council in September with approved recommendations to be implemented in 2021.

Yes. Opportunities for citizen input will be available through an online survey. Virtual open house sessions are also being planned. Timing is yet to be determined but will be communicated well in advance of public engagement. The virtual open house sessions will focus on rate structure and high-water leak program options.

The City’s existing rate structure is referred to as a uniform rate structure. This is the most common rate structure for water and wastewater services across Ontario. A uniform rate structure means that the price per cubic metre of water used is the same regardless of the amount used. The City’s rate structure also includes a minimum monthly fee to ensure all customers contribute to the fixed costs of operating a water and wastewater system.

The following alternative rate structures are being considered to ensure alignment with City goals and objectives:

• Ratepayer affordability – Ensuring the cost of service is not prohibitive.
• Financial sustainability – Maintaining the cost of delivering quality water and wastewater services over the next 10 years.
• Revenue predictability - The rate structure must be simple to understand and result in predictable bills for consumers.
• Conservation – Ensuring best practices in the development of programs to encourage water conservation and demand management. Programs that promote the efficient use of water may reduce operating costs and capital investment needed over time.
• Fairness and equity – The rate structure should not benefit or adversely affect one customer class over another. The rate structure should ensure customers are contributing equitably to the cost of the systems.
• Economic development – The City may wish to support economic development by providing incentives in the rate structure and recognize economies of scale that may exist for larger customers.

• There are several different rate structures that will be considered, including but not limited to:
• Maintaining a uniform rate structure and establishing a fixed monthly rate based on the metre size of a customer. This is common practice across Ontario.
• Declining Block Rate Structure. This means the unit price of water decreases as the volume consumed increases to support economic development for large industries.
• Inclining Rate Structure (Conservation Rate Structure). This means the rates increase as consumption increases by establishing thresholds or blocks at which the rate would change. This approach supports conservation.
• Humpback Rate Structure. This approach uses a combination of increasing and decreasing block rates: rates first increase, then decrease in steps as consumption increases. This approach supports conservation for residential users and economies of scale for high volume users.
• Maintaining the existing uniform rate structure with a minimum monthly charge will also be a consideration as part of this study.

None. A new proposed rate structure will not generate any additional revenues. It would simply reallocate the amount of costs to be recovered from customers based on usage and potential fixed monthly charges.

A comparison of 2020 rates among GTA municipalities found that a typical residential customer in Vaughan consuming 200 cubic metres of water annually is paying a lower cost of service than the GTA average cost and is also lower than the average cost among York Region municipalities.

Some municipalities offer leak forgiveness credits or have high water bill adjustment policies. There are frameworks that provide some financial relief for citizens who receive abnormally high and unintentional water bills due to exceptional and unexpected circumstances (typically due to undetected leaks or other undetermined causes).

In addition to research from the City’s own customer database and information from similar programs operating in other municipalities, there are many policy decisions to consider, including:

• How will the eligibility criteria be defined?
  • This will outline specific requirements that need to be met for a customer’s water leak to be eligible for consideration for an adjustment. This may include identification of the excess amount of water usage to qualify for a leak adjustment (for example, the water usage must exceed twice the monthly average).
• What types of leaks will be eligible?
  • This describes the specific types of leaks that are eligible for an adjustment.
• Who could quality?
  • Consideration will be given to whether this program would be available for all customers (e.g. institutional, commercial, etc.) or restricted only to residential customers.
• During what period of time can I qualify for a high-consumption leak?
  • Decisions will be made to determine the number of billing periods that can be adjusted and the requirements to take corrective action. This typically establishes a maximum number of billing periods that may be adjusted due to the leak.
• How often can I apply for the program?
  • Decisions will be made as to how often an account can be considered for an adjustment.
• How will the program be funded?
  • Considerations will be made in terms of the costs that will not be recovered as a result of a high-water leak. This could be through a special monthly charge that all customers contribute to.

To check for a water leak, follow these steps:

• At the end of the day, ensure that no water is being used in your house (washing machines, dishwashers, sprinklers or toilets being flushed) and record the number on your water meter.
• Do not use any water or flush any toilets overnight.
• First thing in the morning, check the number on your water meter.
• If the number has changed, then you have a water leak somewhere inside or outside of your house.

To check for a toilet leak, follow these steps:

• Remove the tank lid from the toilet.
• Drop about five drops of food colouring in the toilet tank. If you do not have food colouring, try using Worcestershire sauce or another very dark liquid.
• Close the toilet lid and wait 30 minutes. If coloured water seeps into the toilet bowl, you have a leak. The flapper valve may need to be replaced or realigned.
• If the bowl is clear and all the coloured water remains in the tank, you do not have a leak.
• Repeat these steps with all toilets in the house.

In York Region, about 85 per cent of the water is sourced from Lake Ontario, three per cent from Lake Simcoe and 12 per cent from ground water.

The water treatment process has three stages - screening, filtration and disinfection. York Region uses a disinfectant in water treatment processes in order to ensure that its residents get water that is protected from harmful bacteria and other microorganisms. To learn more, visit york.ca/water.

The City of Vaughan owns and operates approximately $2.6 billion worth of water and wastewater assets, including the water distribution system (valued at approximately $1.35 billion) and the wastewater collection system (valued at approximately $1.25 billion).

As revenues vary year to year, the City’s water and wastewater reserves are a source of funding for future capital projects and helps cover costs related to water and wastewater infrastructure repair, rehabilitation and replacement, and maintain necessary levels of service.

For more information about this project, contact Access Vaughan at 905-832-2281.