Hay River council passed its first reading of a bylaw amendment that would see utility rates increase for residents by an average of 12.7 per cent.
The bylaw also adjusted how property owners were grouped, meaning some customers’ rates are set to increase more.
An increase had been scheduled in Budget 2020 and was approved by council, but was deferred due to the COVID-19 pandemic. In the 2021 budget, council approved implementing the 10 per cent increase from the prior year, plus a further increase of 2.5 per cent.
The rate was revised again after town administration looked at the rate utilities are used and had increased over the past couple of years.
If passed the bylaw amendment would also create two new groups, a commercial and industrial class, which would see a 15 per cent increase total from prior years and a government users rate, which would see a 25 per cent increase.
Rates going towards the utility fund had not been increased since 2016, until a 15 per cent increase in 2019, which was to catch up to years of no increases, according to Sam Mugford, Director of Finance for the Town of Hay River.
“This is something that people see on the bills every month and so that’s why I think we tried to come up with a way to put it through these increases, that are equitable,” said Mugford.
Revenues going towards the fund are supposed to exceed expenses, so the town can build up a reserve. But that hasn’t been happening.
Mugford said the utility fund reserve has not grown over the past few years because the current rate is falling behind inflation and the increase in the amount of utilities being used by residents.
The current rates also create a gap between what trucked-in water residents and pipe water residents are paying.
Currently trucked-in water residents are paying less into the utility fund proportionally than pipe water residents. Mugford said if council continues with the past policy of evenly distributing rate increases, that the gap between what trucked-in water and pipe water residents pay will continue to grow.
These bylaw amendments partially fix that gap, but trucked-in water coast will continue to need to be subsidized to be affordable, said Mugford.
Discounted summer rates are also set to be discontinued, because few people applied for them, he added.
A second reading on the bill will be delayed, because several councillors wanted to consult with constituents before moving forward.