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The City of Regina says a possible utility rate hike that works out to $19.21 per month is nearly all due to the need for future capital spending.
Regina city council was told infrastructure spending, not rising operating costs, is the reason residents could be asked to pay an additional $230.52 on their utility bills in 2027.
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The utility forecast was the subject of the last of five pre-budget information meetings Tuesday. It says an additional $19.9 million will be needed for operating changes, equivalent to a rate increase of just over 10 per cent.
Of that, six per cent is required to cover operations and projected capital needs, while another four per cent is needed for debt repayments related to two capital projects, as well as to cover a shortfall in development charges.
“What the forecast shows is that the pressure to increase the rate isn’t really coming from operations,” acting chief financial officer Jeff May said. “It’s the need to generate revenue today to pay for capital investments over the coming years.”
That increase would translate to an average monthly increase of $19.21, or $230.52 per year.
For a typical commercial utilities customer, bills would go up by $146.98 per month, or $1,763 more per year.
This led to a line of questioning by Ward 8 Coun. Shanon Zachidniak about what projects could be pushed down the road.
“When we think about the property tax, the proposed tax increase, and then the utility rate, it’s substantial,” she said.
Kurtis Doney, deputy city manager for city operations, explained his advice would be to prioritize projects that have the biggest impact on the most people.
“In general, what the utility is doing is trying to reduce risk of having service interruptions to drinking water, wastewater, and stormwater,” he explained.
“So from a prioritization perspective, the utility typically focuses on the large pump stations, the large pipes, whether they’re water or wastewater; and then the lower prioritization will be those pipes in front of your homes, where if they break, we can go fix them.”
He also explained councillors could instead choose to go ahead with a project but draw down the utility reserve fund. But Doney warned that the fund is on track to drop below its recommended minimum by 2029 or 2030.
He also warned of the impact of delaying projects planned for 2027.
“If we’re doing a road upgrade, we’re trying to do the underground to make sure that we’re not going back and digging up a new road,” Doney said.
Ward 2 Coun. George Tsiklis, appearing virtually, drew attention to the potential 2028 rate hike of 11.35 per cent, which would mean another monthly increase of $24 for the average residential customer.
He raised a concern that the city is going to tender large projects before the designs are completed, resulting in higher spending and debt on projects such as the Northwest Lift Station.
However, Coun. David Froh, who was chairing the meeting, asked him to keep his questions to items specifically in the budget forecast.
In response to a question from Ward 4 Coun. Mark Burton about the potential impact of a hiring freeze, administration said it would affect frontline services such as repairing water line breaks and opening plugged catch basins. Doney said that with the city’s growth, it’s unlikely that there have been reductions in utility staff in recent years.
May pointed out that only two new full-time equivalent positions in the billing department are proposed, so a freeze would save the $300,000 cost of those two positions.
Ward 5 Coun. Sarah Turnbull asked the administration to reiterate the unique challenges Regina faces due to its geography, and Doney listed the oft-repeated reasons:
- Treated water is carried to Regina approximately 60 km by pipeline from the Buffalo Pound Water Treatment Plant.
- The clay in Regina’s soil expands and contracts, leading to broken pipes.
- Regina’s flat topography means the city requires lift stations to move wastewater to the treatment plant west of the city.
- Wastewater has to be treated to a particularly high standard before going into Wascana Creek. Doney said in the winter, all of the water flowing in the creek downstream of Regina is the city’s treated wastewater.
Proposed operating, capital and utility budgets will be introduced by administration in November, with council budget deliberations set for December.
Mayor Chad Bachynski was absent from Tuesday’s meeting. Reporters had been told he would wait to make himself available for budget questions once all five meetings were concluded.
However, he is in Ottawa as part of a delegation that includes other mayors, municipal groups and Provincial Government Relations Minister Eric Schmalz. The group is meeting with the federal government to discuss infrastructure spending.
Bachynski plans to speak to reporters virtually on Wednesday.
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