2011 Municipal Study - City of Brantford

Municipal Study 2011Water and Wastewater Rate StructureThe establishment of water and wastewater rates is a municipal responsibility and the absence ofstandard procedures across Ontario has resulted in the evolution of a great variety of rate structureformats. It is important that rates be based on sound policies and principles and that they aredefensible by staff and Council. There are recognized processes to be followed in undertaking water/wastewater rate studies, published by various industry leaders including the American and CanadianWaterworks Association (AWWA and CWWA). Municipalities, however, are limited in their optionsbased on the availability of information to calculate class rate structures.BMA has undertaken water and wastewater rate studies on behalf of numerous municipalities. Duringthese studies, our findings are consistent with that of the CWWA which states that, despite industrytrends in rate making, there is, and always will be, a lot of variation in rate setting practices given thatthere is no single rate setting approach or rate structure. Municipalities have different objectives insetting rates including but not limited to:ConservationFinancial SufficiencyRevenue StabilityRate StabilityFairnessEase of ImplementationEconomic DevelopmentEase of UnderstandingThe process typically followed by municipalities in setting water and wastewater rates is to:Identify Evaluation Criteria/ObjectivesIdentify Revenue Requirements For Each ServiceAllocate Costs—Capital, Operating & MaintenanceCalculate Unit Costs—Allocate fixed and volumetric costsDesign The Rate Structure—Inclining, Declining, Uniform, # of blocks, etc.Assess The Effectiveness In Meeting The ObjectivesAssess The Impact On Various Classes And Types Of UsersWater/Wastewater289