Highest jump for users will be 47 per cent
By Greg Bennett
The Town of Shelburne water rates have taken a jump, but are not going to be as high as originally feared.
Last week, the Nova Scotia Utility and Review Board approved the new water rates, effective April 1.
For most average homes the increase will be 47 percent in 2014/15. The rates were originally expected to rise as high as 70 percent more.
The Town of Shelburne’s financially struggling water utility will climbing out of “shallower hole” thanks to an accounting change allowed to help pay down the water utility’s deficit.
A recent water rate study showed that without major changes, the Town’s utility would be almost $1-million in debt within two years.
All municipal utilities in Nova Scotia are expected to operate self sufficiently. But without a major increase in rates, the water study painted a bleak fiscal picture for Shelburne’s water utility. That study, commissioned last year and prepared by G.A. Isenor Consulting, recommended a series of rate increases over the next three years.
Town representatives were pleased that the URB considered the accounting change that allows equipment costs for the past two years that normally come out of the capital budget to be paid for using the utility’s depreciation reserves.
The financial strains on the utility are significant. Water consumption has declined and the utility is still dealing with major debt servicing costs from the Water and Mowatt Street line extension project.
That 2011 water line extension could have potentially added 120 customers to the system. The project was initially launched based on projections that 84 new customers would hook up.
The tenders for the project came in far over budget, costs that were borne completely by the town utility.
Then, after the project was complete, efforts to convince new potential customers to hook up were a failure and only 21 new users have been added due to the extension.