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2021-2024 Water Rate Schedule Provides Certainty for Customers and the Utility

Posted Wednesday, November 25, 2020

The Regional District of North Okanagan (RDNO) adopted a new water rate bylaw, setting water fees for 2021-2024, for Greater Vernon Water (GVW) at the November 18 Board of Directors meeting. The new bylaw is based on the utility's long term Master Water Plan, which ensures that the utility is stable financially and ensures a safe, clean and reliable supply of drinking water. The long term plan includes a capital plan to meet regulatory standards, resilience upgrades to manage climate change impacts, and the replacement of existing assets to manage risk and deliver an appropriate level of service.

Financial sustainability is critical to safeguarding water systems so that they continue to protect public health and contribute to the region's economic vitality. GVW is a utility service provided by the RDNO to customers in the City of Vernon, the District of Coldstream, and Electoral Areas "B", "C", a portion of "D" and bulk water to the Township of Spallumcheen.

Through five months of Greater Vernon Advisory Committee meetings, elected officials discussed challenges to the long term financial sustainability of the utility, such as changes in water demand due to climate change impacts and shifting agricultural markets.  The RDNO Board affirmed that the financial strategies recommended in the Master Water Plan continue to offer a prudent guide for long term management of infrastructure. The previous 2018-2020 water rates bylaw was also based on the Master Water Plan and has allowed the utility to maintain sustainable service levels while aligning rate increases at or close to inflation.

"We have witnessed other water utilities experience major rate increases to cover the costs of failing water mains or more stringent treatment regulations. Our goal is to protect our community from those kinds of dramatic fee hikes by setting out a long term financial plan to sustainably manage our infrastructure both today and 20 years down the road," said Kevin Acton, Chair of the RDNO Board of Directors.

Greater Vernon Water is a regional utility, primarily funded by the fees paid by customers. Those fees must cover the full cost of operations and maintenance to maximize the lifespan of our infrastructure as well as long term costs when assets must be replaced.

Managing costs for customers was an important consideration for the Board. While customer fees fund the majority of the day-to-day operations, the utility strives to secure grant funding whenever possible to offset the cost burden for major capital projects on current customers. The annual water rate increases average 2.4% per year over the next four years; however, the Board chose to limit the increase in 2021 to 1.9% due to the current economic challenges resulting from the pandemic.